SM Investments income dips 48% to P23.4 billion

SM Investments Corp. (SMIC) on Friday reported a 48% drop in net income last year to P23.4 billion as its retail and property businesses recorded lower profit and revenues, while its major bank provided for potential delinquencies.

In a statement, SMIC said its banking business accounted for 55% of last year’s net income, while property made up 33%. Its retail segment contributed 12% to the bottomline.

Frederic C. DyBuncio, the holding firm’s president and chief executive officer, said the Sy-led businesses “are cautiously optimistic about the year ahead” as they continue to “innovate and focus on safety.”

“Our businesses continued to build momentum through the end of 2020 as they addressed the changed behaviors and needs of our customers. Our banks, food retailing and residential property all performed well, while our malls and non-food retail operations showed steady improvements as conditions allowed,” he said.

SMIC’s consolidated revenues declined by 30.4% to P349.2 billion in 2020 from the P502 billion recorded in the previous year.

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BANKING

BDO Unibank, Inc. ended 2020 with a net income of P28.2 billion, down 36.2% from P44.2 billion in 2019. SMIC said the decline was due to the bank allotting P30.2 billion in “pre-emptive” provisions against potential delinquencies from the health crisis.

Net interest income for BDO grew 12% to P133.7 billion, while loans inched up by 3% to P2.3 trillion because of its consumer and corporate accounts.

Current account savings accounts, or CASA, rose 17% to P2.1 trillion as services continued throughout its digital banking platforms, branches, and ATMs.

China Banking Corp.’s net income jumped 20% to P12.1 billion in 2020, while ending the year with a 30% increase in net interest income to P33.8 billion after a 39% decrease in interest expense.

The bank reported gross loans amounting to P572 billion. Deposits for the year reached P835 billion, growing by 8%.

PROPERTY

SMIC’s property business SM Prime Holdings, Inc. saw its net income fall by 52.76% to P18 billion from P38.1 billion the previous year. Its revenues also slowed by 30.77% to P81.9 billion from P118.3 in 2019.

The company’s residential business SM Development Corp. reported an increase of 6.4% in revenues to P46.5 billion from P43.7 billion despite the pandemic. Reservation sales also went up to P99 billion, 10% higher than the P90 billion recorded in the previous year.

The commercial property business posted a 4.35% increase in revenues to P4.8 billion from P4.6 billion previously.

SMIC’s hotels and convention centers recorded P1.6 billion in revenues, a 68.63% drop from 2019’s P5.1 billion.

Revenues from the mall business also fell by 54.2% to P23.6 billion from P57.8 billion in 2019.

Last year, SM Prime opened to the public Olongapo City Convention Center in Zambales.

RETAIL

SM Retail, Inc., which is made up of non-food and specialty stores, posted a 67% drop in net income to P4.1 billion. Its revenues went down 19% to P296.8 billion from P366.8 billion in 2019.

Despite this, the company continued to expand its businesses all over the country.

The SM Store opened two new shops, one in Butuan and another in Zamboanga under new SM City Malls. The gross selling area of the company’s 66 department stores totaled 816,958 square meters in 2020.

SM Retail’s food business, which includes SM Supermarket, SM Hypermarket, Savemore, Alfamart, and WalterMart, expanded by opening 287 new branches.

A total of 351 new stores were opened by SM Retail in 2020, ending the year with 3,019 outlets. These are 66 The SM Stores, 1,550 specialty retail stores, 59 SM Supermarkets, 52 SM Hypermarkets, 209 Savemore, 71 WalterMart, and 1,012 Alfamart stores.

“The total assets of SM grew 7% to P1.2 trillion. SM maintains a healthy balance sheet with a conservative gearing ratio of 37% net debt to 63% total equity,” the company said.

On Friday, SMIC shares dropped by 2.79% to close at P1,009 apiece. — K. C. G. Valmonte

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