SMIC net income flat in 2015

SM Investments Corp.’s (SMIC) bottom line remained flat at P28.4 billion in 2015, the Sy-led company announced in a disclosure to the stock exchange on Monday.

 

However, SMIC also said that it booked a 7-percent growth in its consolidated revenues to P295.9 billion, and a 13-percent increase in its recurring net income. 

 

“Our strong underlying earnings growth in 2015 was due to favorable domestic market conditions and improved efficiencies which helped us widen our margins particularly in retail and property," SM President Harley T. Sy said in an emailed statement.

 

Underlying earnings were driven by a 17-percent growth in retail earnings, 14-percent growth in property recurring net income, and a 10-percent growth in bank net income.

 

For 2015, banks accounted for 40 percent of consolidated earnings, property with 38 percent, and retail 22 percent.

 

SM's BDO Unibank Inc. (BDO) reported a 10-percent growth in its net income to P25.0 billion as loans grew 17-percent to P1.3 trillion and total deposits rose 12 percent to P1.7 trillion.

 

Meanwhile, the company's property business, SM Prime Holdings Inc., increased 14 percent to P20.9 billion. 

 

SMIC's retail business -- consisting of both the food (SM Markets) and non-food (The SM Store) -- booked a 7-percent growth in sales to P211.4 billion while net income rose 17-percent to P6.8 billion.

 

SMIC ended 2015 with total assets worth P771.2 billion, 8 percent higher than in 2014.

 

SM Retail Merger

 

In a separate disclosure, SMIC also said its Board of Directors had approved the merger of its retail arm SM Retail Inc. with companies Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company, Sports Station, and several other specialty stores.

 

These stores have a cumulative 1,374 outlets and delivered some P53 billion in revenues in 2015.

 

“The merger will complement the existing retail portfolio of SM Retail Inc., which includes 53 SM Department Stores, 44 hypermarkets, and 213 supermarkets as well as majority stakes in the local operations of Alfamart, Forever21, Crate & Barrel, and other specialty and apparel retailers in addition to a minority stake in Uniqlo,” it said.

 

Under the merger, the combined entity will have a total of 1,927 outlets and 2.4 million square meters of gross floor area which will be 77.3-percent,owned by SM Retail Inc.

 

“The merger adds both greater diversity and a more extensive footprint to SM Retail’s portfolio and is consistent with our goal of simplifying our corporate structure. It is similar to the consolidation we undertook in 2013 to create our large-scale, mixed-use property business,” Sy said.

 

“As a result, SM Retail will be even better positioned to address the growing needs of Filipino consumers and we expect the merger to be accretive to SM Retail earnings in future years,” he said.

 

Shares of SMIC on Monday closed down P25.00 or 2.96 percent at P820.00 apiece. — DVM, GMA News