SMIC income drops to P12.3 B in H1

MANILA, Philippines - SM Investments Corp. (SMIC), the holding firm for the businesses of tycoon Henry Sy, posted slightly lower profits in the first half, dragged by the earnings decline of the banking and retail units that offset the growth of the integrated property business.

But the expected better performance of the three core businesses for the rest of the year will allow the conglomerate to record a single-digit profit growth this year, company executives said.

In a regulatory filing, the investment firm of the country’s richest man said it posted a 3.1-percent drop in profits to P12.3 billion from P12.7 billion while consolidated revenues rose 7.2 percent to P130.9 billion from P122.1 billion.

Core net income, which excluded extraordinary items such as the hefty trading gains of the banking business last year, improved 11.8 percent to P12 billion in the first semester from P10.7 billion a year ago.

“SMIC sustained its solid performance in the first half with strong underlying revenue and income growth across our core businesses,” said SMIC president Harley T. Sy.

“I think in the first quarter, we mentioned about the budget that is a low single-digit increase in income. I think that budget has not changed,” said SMIC chief finance officer Jose Sio. The mall and banking conglomerate recorded an 11-percent increase in earnings to P27.45 billion in 2013 from P24.67 billion a year ago.

For the first half consolidated net income, the property business accounted for 40.5 percent, followed by banks at 39.8 percent and retail operations at 19.7 percent.

Specifically, umbrella property firm SM Prime Holdings Inc. said its consolidated net income jumped 11.7 percent to P9.8 billion in the first half from P8.8 billion while consolidated revenues climbed 7.2 percent to P33.4 billion from P31.2 billion a year ago.

Rental revenues, which accounted for 53 percent of SM Prime’s consolidated revenues, rose 12.5 percent to P17.7 billion due to new malls that opened in 2013 and 2014, as well as the shopping spaces added in existing malls like SM Megamall. Same-store rental growth grew seven percent in the first half.