Banking units boost SMIC earnings
Sy family-led SM Investments Corp. (SMIC), the country’s largest conglomerate, booked a 6-percent growth in first-quarter earnings to P18.4 billion on the strong performance of its banking units.
In a stock exchange filing on Wednesday, SMIC said revenues in the January to March period had inched up by 4 percent to P144 billion. This was despite a 20.5-percent decline in the earnings delivered by SM Retail to P3.1 billion, as tamer consumer spending pulled down sales.
“We continue to benefit from the country’s underlying economic growth and we adapt to reflect consumers’ evolving spending habits and priorities,“ SMIC president and CEO Frederic DyBuncio said in a statement.
BDO Unibank Inc. and China Banking Corp. accounted for 52 percent of the group’s earnings. The property business via SM Prime Holdings Inc. contributed 29 percent; SM Retail, 12 percent; and portfolio investments, 7 percent.
SMIC’s total assets stood at P1.6 trillion by the end of the quarter.
At the same time, SMIC and SM Prime are looking to raise fresh capital via the offshore bond market to help support their expansion plans over the next few years.
In separate disclosures, the companies said their subsidiaries, SMIC SG Holdings Pte. Ltd. and SMPHI SG Holdings Pte. Ltd., would jointly issue $3 billion in bonds through a European medium-term note (EMTN) program.
“This EMTN program will allow SMIC and [SM Prime] to tap the offshore bond market to fund its continued growth and expansion,” they said.
EMTNs allow issuers—in this case, SMIC and SM Prime—to raise capital via foreign markets. These notes usually mature in less than five years.
Earlier, SMIC said it would boost its capital spending this year by as much as 44 percent to P115 billion to bankroll expansion plans in the provinces, mainly through SM Prime.
The real estate giant will get the biggest share of the spending allocation at P100 billion, as SM Prime plans to open four new local malls and launch 10,000 units of residential developments within the year.
For its part, SMIC said provincial expansion would allow more access to modern retailing, financial services and integrated property developments.
On the retail side, SMIC chief financial officer Jonathan Ng earlier noted that they were looking to open around 100 department and specialty stores, as well as supermarkets.
SM Supermalls, meanwhile, plans to launch at least three new projects in China in the next two years. The conglomerate currently has eight malls spanning 1.6 million square meters in mainland China.
“Looking ahead, our outlook remains cautiously optimistic and our expansion is on track,” DyBuncio said.
