SMIC approves property-for-shares swap with subsidiary ICDC

SM Investments Corporation (SMIC), the Sy family’s flagship conglomerate, has announced the acquisition of 184 hectares of land in Muntinlupa City from its nearly wholly-owned subsidiary, Intercontinental Development Corporation (ICDC), through a property-for-shares swap.

In a disclosure to the Philippine Stock Exchange, SMIC stated that its Board of Directors has approved the transaction, which involves the transfer of ICDC’s lands in Susana Heights, Muntinlupa City, to SMIC in exchange for new common shares of the parent company. SMIC owns 96.75 percent of ICDC.

SMIC highlighted that the decision to proceed with the property-for-shares swap was made in accordance with applicable Securities and Exchange Commission (SEC) rules and regulations. The boards of both SMIC and ICDC deemed the transaction necessary and beneficial, aiming to optimize the utilization and development of the properties in line with their broader business strategies.

The acquisition of these properties will enhance SMIC’s real estate assets, though the company noted that the transaction is not expected to have a material effect on its business, financial condition, or operations.

SMIC, one of the largest conglomerates in the Philippines, recently reported a 10 percent increase in consolidated net income, reaching PHP40.2 billion in the first half of 2024, up from PHP36.5 billion in the same period last year. The firm also posted a 13 percent growth in net income to PHP21.8 billion in the second quarter alone.

Consolidated revenues rose by five percent in the first half, amounting to PHP301.4 billion, compared to PHP286.7 billion year-on-year. In the second quarter, revenues grew by six percent to PHP157.7 billion.

Frederic C. DyBuncio, President and CEO of SM Investments, attributed the double-digit growth to a favorable business environment, noting improved discretionary spending that boosted retail sales in the second quarter. He added that SMIC’s banking, property, and portfolio investments also continued to deliver strong results. Despite the positive performance, DyBuncio maintained a cautiously optimistic outlook for the remainder of the year.

Banking contributed the largest share of SMIC’s total net earnings at 50 percent, followed by property at 27 percent, retail at 14 percent, and portfolio investments at nine percent.