SMIC sees profit growth slowing down this year

MANILA, Philippines - Mall, banking and retail conglomerate SM Investments Corp. (SMIC) said it expects slower profit growth this year in the absence of extraordinary trading gains from Banco De Oro (BDO), which also weighed down earnings in the first quarter.

“Depending on the result of property and the bank, [profits] could be on the positive territory...lower single digit but positive,” SMIC chief finance officer Jose Sio said in a briefing.

“Lower than the rate of growth of previous year, but on absolute amount, it is higher,” Sio said, adding that 2013 was an unusual year because of the bank’s trading gains.

The holding firm’s income climbed 11 percent to P27.45 billion in 2013 from P24.67 billion a year ago, driven by BDO gains.

SMIC, the investment arm of the Philippines’ richest man Henry Sy, reported yesterday that its consolidated net income fell 16 percent to P6.24 billion from P7.42 billion a year ago.

“The consolidated net income in 2013 reflected exceptional trading gains in the group’s banking businesses. These contributed to a surge in the earnings of a number of banks during that period, among them BDO,” SMIC said.

However, on a recurring basis, SMIC said its net income grew 11 percent to P6.24 billion from P5.61 billion while underlying revenues picked up 12 percent to P60.4 billion from P53.71 billion.

 â€œWe are pleased with our performance in the first quarter, having delivered double-digit underlying top and bottom line growth,” said SMIC president Harley T. Sy.

Retail started the year with strong revenue growth even as the intensifying competition puts pressure on margins while the umbrella property group has started operating as a more cohesive integrated unit, Sy said.