051107: SM Investments posts 14% profit hike in Q1

By Zinnia B. Dela Peña
The Philippine Star 05/11/2007

SM Investments Corp. (SMIC), the flagship investment holding firm of taipan Henry Sy, posted a net profit of P3.3 billion in the first quarter this year, up 14 percent from the previous level, as all its core businesses registered higher sales on improved economic activities.

In a statement, SMIC said consolidated revenues more than doubled to P25.9 billion due to the opening of new malls, the expansion of its department stores, and the acquisition of 28 SM supermarkets and nine SM hypermarkets. These stores were injected into SMIC’s retail sector in June 2006, effectively doubling the sector’s revenue base. As a result, merchandise sales of SMIC’s retail sector jumped 142 percent to P20 billion.

SMIC said another growth driver was real estate operations, which contributed 12 percent of total income compared with an income contribution of only four percent last year.

"We are also seeing a bigger income contribution from our real estate operations as more transactions from our residential projects are booked on the progress of its condominium development in Bicutan and Sta. Mesa," SMIC president Harley Sy said.

"SMIC is off to a good start in 2007 with strong earnings growth in the first quarter. The economy continues to be buoyant this year and we are feeling the positive effect in all our businesses. We are confident that the trend will be sustainable. As such, we continue to gear up through our expansion of stores, malls, banks, and property projects worth P20 billion this year, which speaks of SM’s strong commitment to the Philippines," he added.

SMIC is setting aside P95 billion over the next five years for the continued expansion of its shopping mall, retail, and banking operations, its large-scale eco-tourism project in Nasugbu, Batangas and landbanking activities.

The group plans to build three to five new malls every year as it seeks to further solidify its dominant foothold in the shopping mall industry.

About P7.5 billion of the 2007 capital budget will be funded by SMIC itself while the balance will come from its subsidiaries either through internally-generated cash or borrowings.

SMIC earlier raised $300 million from a convertible bond issue.

 

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