SM Group reports P55.9-billion profit on solid consumer confidence

SM Investments Corp. (SMIC) reported a consolidated net income of P55.9 billion in the January to September period, higher by 30 percent than P42.9 billion in the same period last year.

Consolidated revenues rose 15 percent to P440.4 billion from P382.0 billion in the same period last year.

“Our ongoing healthy growth reflects buoyant consumer activity in malls and sustained spending in discretionary retail categories,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said. “We look forward to the fourth quarter, while continuing to monitor the impact of food prices and interest rates on consumer wallets.”

Of total net earnings, retail accounted for 18%. Banking accounted for the largest share at 47% while property contributed 26% and portfolio investments pitched in 9%.

Property

SM Prime reported P30.1 billion in net income in the first nine months of 2023, 37% higher than P22.0 billion in the same period last year. Consolidated revenues grew 26% to PHP92.6 billion from last year’s PHP73.7 billion.

SM Prime’s mall business, which accounts for 57% of consolidated revenues, posted P52.5 billion in the nine-month period, up by 37% from P38.2 billion in the same period last year. Mall rental income rose to P44.8 billion, 29% higher than last year’s P34.7 billion. SM Prime’s cinemas, event ticket sales, and other revenues increased significantly to P7.7 billion from P3.5 billion in the same period last year.

SM Prime’s primary residential business, led by SM Development Corp., reported P28.7 billion, 10% higher than P26.1 billion in the same period last year. SMDC’s reservation sales reached P89.3 billion, 6% higher than P83.9 billion in the same period last year.

SM Prime’s other key businesses, which include offices, hotels, and convention centers, generated P9.5 billion in revenues, up 33% from PHP7.2 billion in the same period last year.  

Retail

SM Retail reported net income%u202Fwas at P13.7 billion, up 19% from P11.5 billion in the previous period.

Retail revenues grew 12% to%u202FP290.6 billion from P258.4 billion in the previous period.

Same store sales for the department store and specialty retail businesses grew 18% and 9% respectively, reflective of strong consumer spending in key categories, while store expansion also buoyed growth.

Food retail performance remained positive, supported by volume growth and expansion.

Banking

BDO Unibank, Inc. (BDO) reported its net income was P53.9 billion compared with P40.0 billion in the same period last year backed by broad-based growth across its core businesses.

Net interest income increased to P137.4 billion with customer loans growing 7.5% year-on-year to P2.7 trillion and deposits expanding 12% to PHP3.4 trillion.

Non-performing loan (NPL) ratio remained stable at 1.99% despite the higher interest rate environment, while NPL coverage improved to 176%. The bank continues to set aside provisions in line with its conservative credit and provisioning policies.

China Banking Corporation posted a consolidated net income of P16.2 billion in the first nine months, 10 percent higher compared to same period last year on the back of robust growth from core businesses and lower loan loss provisions. 

Portfolio Investments

Portfolio investments continued to sustain growth, contributing 9% to the Group’s consolidated net income.

Philippine Geothermal Production Company and NEO, SM Investments’ office portfolio, contributed significantly to net income.