SM Investments Q1 net income grows 33% to PHP17.3 bn on resilient consumer demand

PASAY CITY, Philippines, May 10, 2023 - SM Investments Corporation (SM Investments), the country's leading conglomerate, reported its consolidated net income grew 33% to PHP17.3 billion in the first quarter from PHP13.0 billion in the same period last year.

Consolidated revenues in the January to March period increased 21% to PHP138.2 billion, from P113.8 billion in the same period last year.

"This year has started well, continuing the strong momentum of 2022. We are well positioned for continued growth and prepared for any macroeconomic uncertainties. Meanwhile the whole group is pushing ahead with regional expansion plans to serve more Filipinos," SM Investments President and Chief Executive Officer Frederic C. DyBuncio said.

Banking accounted for 47% of reported net earnings from core businesses, followed by property at 26%, retail at 17% and portfolio investments at 10%.

Banking

BDO Unibank, Inc. reported a net income of PHP16.5 billion, up 41% from the same period last year and bolstered by solid loan and deposit growth, robust fee-income generation and improved asset quality.

China Banking Corporation booked a PHP5.0 billion net income for the first quarter, up 3% from the same period last year, driven by robust asset base expansion, strong net interest income and lower credit provisions.

Property

SM Prime Holdings, Inc. (SM Prime) registered a consolidated net income of PHP9.4 billion, 27% higher than the PHP7.4 billion in the same period last year. Consolidated revenues grew 20% to PHP28.7 billion from PHP23.9 billion. 

The Philippine mall business revenues increased 88% to PHP15.4 billion from PHP8.2 billion.

The rental income of local malls increased 72% to PHP13.0 billion with the increase in tenant sales and foot traffic and the full charging of rental fees implemented since the second half of 2022. 

Revenues of its residential business group, led by SM Development Corp. (SMDC), was lower by 29% to PHP8.5 billion partly due to canceled sales as an effect of high inflation, rising domestic interest rates and the lapse of the Bayanihan Law. However, cancellations are beginning to moderate in the first quarter of 2023. SMDC's sales take-up rose 15% to PHP35.8 billion.

Revenues of offices, hotels, and convention centers grew 59% to PHP3.2 billion.

Retail

SM Retail net income grew 51% to PHP3.9 billion from PHP2.6 billion. Revenues were up 22% to PHP91.2 billion from PHP74.5 billion as consumers' purchasing power remained stable despite higher inflation.  

Notably, the department store business was strong as improving employment continued to support spending. Food retailing was likewise strong with constant spending on food essentials. Specialty retail growth was also driven by discretionary spending on fashion, accessories and sports items.

Portfolio Investments

Portfolio investments continued to contribute to revenues and net income, gaining momentum from the turnarounds from last year.

SM Investments expects the portfolio businesses to make a bigger contribution to the Group's revenues and earnings over time.

Balance Sheet

Total assets of SM Investments stood at PHP1.5 trillion. Gearing ratio remained conservative with 35% net debt to 65% equity. 

About SM Investments Corporation

SM Investments Corporation is a leading Philippine company that is invested in market-leading businesses in retail, banking, and property. It also invests in ventures that capture high growth opportunities in the emerging Philippine economy.

SM's retail operations are the country's largest and most diversified with its food, non-food, and specialty retail stores. SM's property arm, SM Prime Holdings, Inc., is the largest integrated property developer in the Philippines with interests in malls, residences, offices, hotels and convention centers as well as tourism-related property developments. SM's interests in banking are in BDO Unibank, Inc., the country's largest bank, and China Banking Corporation, the 6th largest bank.

For information, please visit www.sminvestments.com