Higher Consumer Demand Lifts SM Investments Profit

Earnings of SM Investments Corp., the parent company of the SM Group, expanded by eight percent in the first half, supported by sustained consumer demand and the strength of its diversified business model.

SMIC’s consolidated net income from January to June improved to P45.9 billion from P42.6 billion in the same period last year.

Banking accounted for 47 percent of the group’s net income, followed by property (27 percent), retail (15 percent) and portfolio investments (11 percent).

Revenues during the first semester increased by six percent to P339.2 billion from last year’s P319.2 billion.

SMIC executive vice president for finance Franklin Gomez presented the figures during a media briefing at Lanson Place in Pasay City on Wednesday, Aug. 12.

SMIC president Frederic DyBuncio said consumer spending in its retail stores and malls remained healthy despite recent economic shocks.

“The Filipino consumer was tested during the first half of the year, but our businesses proved to be resilient,” DyBuncio said.

“Steady demand across our consumer-led businesses plus solid contributions from our portfolio companies continue to reflect the strength of our diversified business model. This gives us the confidence to keep investing for long-term growth,” he said.

SM Retail Inc. reported a five-percent increase in net income to P8.9 billion, as the company efficiently managed expenses amid a higher inflation environment.

Food retail posted steady sales growth across its supermarket and minimart chain formats, while specialty retail’s higher sales were driven by the home, other fashion and kids categories.

As the group’s largest consumer-facing business, the SM Retail business contributes significantly to recurring cash flows at the parent level.

SMIC said consumer demand was likewise evident in the group’s mall business, where revenues rose by eight percent to P41.8 billion on the combined effect of higher occupancy, stronger tenant sales and improved operational efficiency.

The group also saw stronger performance from its portfolio investments, driven by a turnaround in Atlas Consolidated Mining and Development Corp. due to higher copper prices.

2GO Group Inc. registered revenue growth across all categories, supported by higher passenger volumes in the travel segment and higher volumes in the logistics category from online purchases, while Philippine Geothermal Production Co. Inc. benefited from adjustments in energy prices.

DyBuncio said SM Investments remains positive about its outlook for the second half of the year, while staying mindful of macroeconomic uncertainties.

“Our diversified portfolio, prudent balance sheet and disciplined approach to capital allocation position us well to continue investing in the Philippines and creating long-term value for our customers, communities and shareholders,” he said.