SMIC projects operations to recover in 2 to 3 years

MANILA, Philippines — SM Investments Corp. (SMIC), the conglomerate of the Sy Group, expects its businesses to return to pre-pandemic level  in the next two to three years.

“The impact of COVID-19 to the group’s businesses is manifested in the operating results for the year 2020. Consolidated revenues dropped 21.5 percent and consolidated net income attributable to owners of the parent dropped 47.5 percent,” SMIC said in its registration statement for its upcoming P15 billion worth of bonds targeted to be issued in February 2022.

SMIC said that during the quarantine period in 2020, certain stores and malls of the group had to temporarily stop operations.

This resulted in the 18.2 percent decline in merchandise sales and 47.8 percent decline in rent revenues in 2020.

“To assist its mall tenants, SM Prime granted waivers on rent and/or extended rental discounts that totaled P23.3 billion  at yearend 2020,” SMIC said.

SMIC said SM Prime malls in the Philippines continue to feel the impact of mobility restrictions through the nine months to  September.

“Processes continue to be streamlined to manage costs and initiatives to generate more revenues implemented,” it said.

For the office business, SMIC said COVID-19 did not have any significant impact on SM Prime offices since its primary tenants are business process outsourcing (BPO) offices that were allowed by the Inter-Agency Task Force (IATF) to continue to have normal operations throughout the quarantine period.

For the retail business, SM Retail stores demonstrated resilience and high adaptability to the COVID economic environment.

Net proceeds from the bond issue would be used to refinance SMIC’s existing debt obligations and for general corporate purposes.

For the rest of the year, SMIC said it would continue with its expansion and construction of malls, residential and commercial properties, as well as the opening of new retail stores across the various formats, mainly in the retail food group, and selectively in the retail non-food group.