SM INVESTMENTS CORP., the holding firm of mall magnate Henry Sy, yesterday reported a full-year 2007 net income jump of 14%, citing a strong retail merchandising business.
Consolidated net income reached P12 billion last year, up from 2006’s P10.6 billion, the firm said in a statement.
Excluding extraordinary gains, net recurring income grew by 25% as earnings before interest, taxes, depreciation and amortization or EBITDA improved by 28% to P25.1 billion.
SM Investments derives its revenues from listed subsidiaries SM Prime Holdings, Inc., Banco de Oro Unibank, Inc., China Bank and SM Development Corp.
"All of the company’s core businesses continued to grow and deliver encouraging results on the back of an improving domestic economy, thus enabling SM to benefit from the business synergies created by its subsidiaries," SM chief financial officer Jose T. Sio said.
Consolidated revenues likewise rose by 38% to P122.5 billion against P88.7 billion in 2006 as retail revenues expanded by 43% to P103.2 billion.
Of the P122.5 billion in revenues, 84% largely came from the retail merchandising business, while shopping malls and real estate contributed 10% and 3%, respectively. Equitized earnings of both Banco de Oro and China Bank accounted for 31% of net income.
SM Investments’ retail merchandising business posted a net income of P3.3 billion after realizing gains from full-year operations of SM Supermarkets and SM Hypermarkets, which were acquired in June 2006.
Last year, SM Investments opened two new department stores in SM City Bacolod and SM City Taytay and two new hypermarkets in SM Supercenter Muntinlupa and SM City Taytay.
SM Prime Holdings, its mall operating unit, said last year’s net income climbed 10% to P6 billion as gross revenues totaled P15.3 billion during the period.
It ended the year with 30 malls, following the inauguration of SM City Bacolod, SM City Taytay and SM Supercenter Muntinlupa. SM Prime now has a combined gross floor area of 3.9 million square meters with foot traffic of 2.5 million daily.
This year, SM Prime will be spending P6 billion to open malls in Pangasinan, Baliuag, Bulacan, and Marikina as well as expand SM Fairview and Megamall.
The real estate and property development business, meanwhile, had revenues surging 142% to P3.2 billion and a net income of P1.12 billion, mainly on profits from SM Development Corp.’s condominium projects.
SM’s hotel investment group last year took off with the 132-room expansion of the Taal Vista Hotel in Tagaytay City, while also beginning the refurbishment of the hotel beside SM City Cebu.
Homebuilder SM Development Corp.’s net hit P1.2 billion.
Banco de Oro Unibank, the merged Banco de Oro and Equitable PCIBank, reported a consolidated net income of P6.5 billion, while China Bank had P3.7 billion in net income.
Shares of SM Investments yesterday closed 5.36% lower at P15 to P265 as market sentiment mirrored the three-digit drop on Wall Street.
