SMIC sees higher Q2 earnings

MANILA, Philippines - SM Investments Corp. (SMIC), the investment vehicle of the family of tycoon Henry Sy, said it expects higher net earnings in the second quarter compared with the first quarter on the steady improvement in consumer spending and strong increases in business investment.

On the sidelines of The Asset’s 6th Philippine Forum yesterday, SMIC chief finance officer Jose Sio said the firm is likely to post a double-digit growth in net income during the second quarter in spite of the current challenges brought about by surging fuel prices and Greece’s debt crisis.

“All indications show that we can meet double-digit growth in the second quarter. We are on track to meet our net income growth target of 12 percent this year,” Sio said.

In the first quarter this year, SMIC posted a net profit of P5.37 billion, 13 percent higher than the previous level. Banking remained the group’s main income driver, contributing 31.9 percent of groupwide earnings, followed by malls with 25.4 percent , retail (24.7 percent) and real estate (18 percent).

Consolidated revenues, on the other hand, stood at P43.4 billion, up 7.6 percent from P40.35 billion recorded the previous year.

Banco De Oro Unibank Inc. reported an 18-percent increase in net profit to P2.44 billion. Net interest income rose two percent to P8.5 billion while gross customer loans grew 16 percent to P42.3 billion.

SM Prime Holdings Inc., on the other hand, reported a 12-percent jump in net earnings to P2.12 billion from P1.89 billion. Revenues expanded 13 percent to P6.07 billion while EBITDA rose 11 percent to P4.19 billion, for an EBITDA margin of 69 percent. These results include the operations of the three SM malls in China, located in the cities of Xiamen, Jinjiang and Chengdu.

For 2011, SM Prime will open three new malls in the country and one in China. It has opened SM City Masinag making it the 41st shopping mall in the country and its second in the province of Rizal after SM City Taytay. The new mall has a gross floor area (GFA) of 90,261 square meters (sqm) and occupies 37,017 sqm of land.

The retail group reported a net income of P913 million on sales of P31 billion, which grew seven percent from last year’s P29 billion.   It opened three new stores in the first three months of 2011, for a total number of 142. The total consists of 40 department stores for the non-food group; 102 for the food group, of which there were 30 supermarkets, 43 SaveMore branches, 25 hypermarkets, and four Makro outlets.

SM Development Corp., which accounts for 85 percent of the net income of SM’s property group, posted a 45-percent hike in its consolidated net income to P916.3 million for the first quarter of 2011, as against P632.4 million. Consolidated revenues reached P3.4 billion, 70 percent higher than that of last year.