[ Manila Bulletin Online ] October 28, 2008
By JAMES A. LOYOLA
SM Investments Corporation is confident it will meet its net income target this year of P14 billion for a growth of about 13 percent over that of 2007 despite the challenges posed by the ongoing global crisis.
According to SM President Harley Sy said in a statement yesterday that "our confidence stems from the strong performance of the retail stores, the malls and the property businesses."
He added that, fundamentally, consumer spending is better during the second half given that oil prices have gone down and the peso weakened, a factor that is favorable to families of overseas Filipino workers.
For the rest of the year, Sy said SM will still open two department stores, two hypermarkets and two malls in Rosales, and Baliuag.
SM, under its property subsidiary SM Land, Inc., will also launch the new wing of Taal Vista Hotel which has completed its P650-million expansion which doubled the hotel’s number of rooms from 130 to 260 and added a grand ballroom with a 1,000 seating capacity.
SMIC is expected to release its third quarter results on the week of November 10, 2008. The firm posted a 14 percent growth in net income to P6.5 billion for the first half of 2008.
SMIC chief finance officer Jose Sio said consolidated revenues increased 17 percent to P65.6 billion, as retail sales jumped 21 percent to P52.6 billion. Rental revenues from malls and other properties grew by 11.8 percent to P6.4 billion.
"SM’s sound performance during the first half of the year amid many market challenges reinforces the defensive position that SM has taken over the years," said SM president Harley Sy.
He added that "our businesses have been equipped to sail through headwinds of spiraling fuel and food prices and changing consumer patterns. We continue to take a long-term perspective so that we view the market turbulence as being temporary. As such, we remain on course as far as our expansion program is concerned."
Among SM’s four core businesses, shopping malls contributed the most to the company’s net income profile, accounting for 34 percent of the total.
This was followed by retail merchandising and banking with 32 percent and 27 percent, respectively. SM’s fast emerging business in real estate contributed 7 percent.
Retail merchandising reported a net income of P1.6 billion, up 9.5 percent from P1.4 billion for the first half of 2007. This translates to a net margin of 3 percent.
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