Thursday, 5 March 2009

Sy-led SM Investments hikes profit to P14B amid a challenging 2008
Kristine Jane R. Liu
BusinessWorld Online

PROFITS OF Sy-led holding firm SM Investments Corp. (SMIC) went up by more than a tenth to P14 billion amid a challenging environment last year.

"SM managed to perform with-in expectations, supported largely by the strong performance of our retail and property groups," SM President Harley T. Sy told the Philippine Stock Exchange yesterday.

Excluding extraordinary items, SM’s net recurring income went up by 11% to P11.6 billion. In 2008, SM reported extraordinary gains from the sale of San Miguel shares, which more than compensated for the mark-to-market losses incurred by the group in its trading positions as a result of the global financial crisis.

SMIC said revenues increased by almost a fifth to P147.5 billion, boosted by retail and real estate sales. SMIC is mainly involved in four core businesses, namely retail merchandising, shopping malls, banking and financial services, and property.

The firm’s net debt-to-equity ratio stood 18%, while its cash balance was P47.7 billion," SMIC Executive Vice-President and Chief Finance Officer Jose T. Sio said.

"This reflects the strength of [SMIC’s] financial position, which will not only allow it to weather the current financial turmoil, but also to benefit from valuable opportunities arising from the crisis which, in turn, will help the company emerge as a stronger business when the global economy recovers," he added.

SMIC is involved in four core businesses namely, retail merchandising, shopping malls, banking and financial services, and property. The Sy-led company said its retail and mall business contributed the most to its net income, followed by its banking and real estate units.

Profits of SMIC’s retail group went up by almost a quarter to P3.4 billion last year. The retail group consists of SM Supermarkets, SaveMore stores, SM Hypermarkets, Makro and SM Department Store, which continued to post growth despite high inflation during the first half of the year.

"SM department stores, meanwhile, rallied in the second half as consumer confidence got a strong lift from the sudden decline in gasoline prices, easing inflation, and a weaker peso. Many of SM’s customers are families of Filipino workers overseas," it said.

Meanwhile, mall unit SM Prime Holdings, Inc. posted a 7% net profit growth to P6.4 billion.

Analyst Astro del Castillo of First Grade Holdings, Inc. said SMIC’s higher profit was impressive, but there was no assurance that it would be able to duplicate its performance this year. "The economy remains uncertain. If consumption in the first half continues to remain strong, then we can say that SMIC might be able to grow by more than a tenth this year," he said.

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