SM Investments Corporation (SM Investments) reported a 10% increase in consolidated net income in the first half of 2024 to P40.2 billion, up from P36.5 billion in the same period last year. This reflected a 13% growth in net income in the second quarter, reaching P21.8 billion.
Consolidated revenues rose 5% in the first half to P301.4 billion from P286.7 billion year-on-year. Second quarter revenues grew by 6% to P157.7 billion.
"SM's double-digit growth in the first-half results reflects a positive environment for our businesses. Improved discretionary spending in the second quarter lifted retail sales while our banks, property, and portfolio investments continued to deliver. We remain cautiously optimistic for the year's balance," said SM Investments president and chief executive officer Frederic C. DyBuncio.
Of total net earnings, banking accounted for the largest share, at 50%. Property contributed 27%, retail accounted for 14%, and portfolio investments contributed 9%.
"We were also pleased with the demand and positive feedback on our recent maiden Euro Medium-Term Notes issuance, highlighting the quality of our financials and investability of strong Filipino companies," DyBuncio added.
On July 18, SM Investments priced a USD500 million drawdown from its $3 billion EMTN program, now listed on the Singapore Exchange Securities Trading Limited. The issuance was 3.2 times oversubscribed, with final demand reaching $1.6 billion, marking SM Investments' largest offshore bond issuance since 2014.
Retail
SM Retail net income stood at PHP7.6 billion in the first half, up from PHP8.4 billion last year, due to a high base effect from the impact of lifting mobility restrictions on consumption in 2023. Revenues grew 4% in the first half to P196.9 billion from P188.5 billion.
The second quarter reflected higher growth by 6% in retail revenues and 2% in net income indicative of spending on discretionary items such as appliances, beauty and fashion. Specialty retail revenues increased 5%.
Food retail revenues grew by 7%.
In the six months ending June 2024, SM Retail increased by 355 stores, bringing the total retail network to 4,208.
Property
SM Prime Holdings, Inc. reported its consolidated net income increased 13% to P22.1 billion in the first half from P19.4 billion in the same period last year. Consolidated revenues grew 8% to P64.7 billion from P59.9 billion.
SM Prime's mall business, which accounted for 58% of consolidated revenues, grew 8% to P37.5 billion. Mall rental revenues increased by 9% to P32.1 billion.
SM Prime's primary residential business accounted for 29% of consolidated revenues and registered revenue growth of 8% to P18.9 billion. Reservation sales stood at P40.2 billion.
Other business segments, including offices, hotels, and convention centers, registered 13% revenue growth to P7.0 billion.
Banking
BDO Unibank, Inc. (BDO) posted net earnings of P39.4 billion in the first half, 12% higher year-on-year, on the stronger momentum from its core intermediation and fee-based service businesses.
Net interest income rose 11% to P99.6 billion. Gross Customer Loans expanded by 13% across all market segments, while total deposits grew by 13%.
Asset quality remained stable despite elevated interest rates. The non-performing loan (NPL) ratio settled at 2.06%, while NPL coverage stood at 169%, better than the industry average.
The bank issued its third ASEAN Sustainability Bond on July 24, raising P55.7 billion to finance and/or refinance eligible projects that will further aid the country's sustainable development.
China Banking Corporation reported net income in the first half rose to a record P11.4 billion, up 6% compared to the same period last year, due to stronger core lending and deposit-taking activities.
Net interest income was 19% higher at P30.4 billion, offset by a rise in interest expense.
Gross loans rose 10% to P817 billion on strong demand across market segments. Deposits grew faster than the industry average to P1.3 trillion, up 14%. Credit quality improved amid significant loan expansion, with a better-than-industry NPL ratio of 1.9%.
Portfolio Investments
Atlas Consolidated Mining and Development Corporation reported an increase in net income to P2.07 billion, while revenues grew 23% to P12.5 billion due to higher copper metal prices.
The Philippine Geothermal Production Company, Inc. (PGPC) recently embarked on the exploration and development of new geothermal energy sources in various parts of Luzon, which will help bolster power security for that region and advance the country's renewable energy objectives.
2GO Group, Inc. (2GO) launched new passenger vessels, 2GO M/V Masigla and 2GO M/V Masikap, in the second quarter. Both vessels will sail from Manila to destinations in Visayas and Mindanao. In addition, both vessels will carry containerized freight and rolling cargo for businesses and consumers.
The balance sheet shows that SM Investments' total assets increased by 1% to P1.6 trillion. The gearing ratio remained conservative, with 33% net debt and 67% equity.
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