SM Investments posts 14% profit hike to P12B

SM Investments Corp. (SMIC), the listed holding firm for the various business interests of retail tycoon Henry Sy, posted a net income of P12 billion last year, 14 percent higher than the previous year’s P10.6 billion on robust revenues across all its business units, particularly its retail merchandising operations.

In a financial report filed with securities regulators, SMIC said consolidated revenues grew 38 percent to P122.5 billion from P88.7 billion a year ago, driven by a 43-percent jump in retail revenues.

Retail merchandising registered revenues of P103.2 billion, accounting for 84 percent of total revenues. Net earnings went up 30 percent to P3.3 billion due to the inclusion of the full-year operations of SM Supermarkets and SM Hypermarkets, which SMIC absorbed in June 2006.

Rental income, mainly coming from shopping mall operations, amounted to P11.1 billion or an increase of 13 percent from the year-ago level while revenues from cinema ticket sales and amusement rose 13 percent to P2.5 billion.

Operating income grew 28 percent to P20.8 billion, resulting in an operating margin of 17 percent.  Excluding extraordinary items, SMIC’s net recurring income climbed 25 percent.

EBITDA amounted to P25.1 billion, up 28 percent from the 2006 level.

SMIC’s banking subsidiaries Banco De Oro and China Banking Corp. accounted for 31 percent of total group income, followed by shopping malls (30 percent), retail merchandising (28 percent) and real estate (11 percent).

“We thank all our customers, shareholders, management and employees, tenants and suppliers, and all our other stakeholders for their patronage and support for the company all throughout 2007. It is because of them that we optimistically look at 2008 as another opportunity for further growth and expansion for the SM Group,” SMIC president Harley T. Sy said.

SMIC chief financial officer Jose T. Sio, for his part, said   the whole of 2007 proved to be satisfactory as the company attained its objectives for the year. “All of the company’s core businesses continued to grow and deliver encouraging results, on the back of an improving domestic economy, thus enabling SM to benefit from the business synergies created by its subsidiaries.”

Aside from retailing and shopping malls, SMIC is also into banking, financial services and property development.

Shopping mall unit SM Prime Holdings Inc. reported a 10-percent rise in 2007 net profit to P6 billion on gross revenues of P15.3 billion. EBITDA stood at P11 billion or an increase of 16 percent.

Last year, SM Prime opened three malls —  SM City Bacolod (with a gross floor area of 61,413 square meters), SM City Taytay (with a GFA of 91,920 sqm) and  SM Supercenter Muntinlupa (with a GFA of 53,986 sqm).

Those that expanded were SM City Pampanga, SM City Cebu and SM Mall of Asia. These brought to 30 SM Prime’s total branch network, 13 of which are in Metro Manila.

SMIC said all 30 malls have a GFA of 3.9 million sqm with an average daily pedestrian count of 2.5 million.

This year, SM Prime is planning to spend P6 billion for the opening of three new malls (SM Supercenter Rosales in Pangasinan, SM City Baliuag in Bulacan and SM City Marikina in Metro Manila) and and the expansion of SM City Fairview and SM Megamall. By end-2008, the company expects a total of 33 malls in the country  with a combined GFA of 4.1 million sqm.