SM Investments says logistics, geothermal to drive earnings growth

SY-LED SM Investments Corp. projected that its portfolio investments will account for more than 10% of the company’s total earnings in the medium-term led by its logistics and geothermal ventures.

“We think we can get this to the mid-teens in percentage contribution over the medium term. Particularly, our optimism lies in the potential contributions of logistics and geothermal ventures to drive faster growth,” SM Investments Consultant for Investor Relations and Sustainability Timothy Daniels said in a recent forum.

“The investments we made in Philippine Geothermal Production Co. (PGPC) and in logistics with 2GO [Group, Inc.] and Airspeed, have performed well,” Mr. Daniels added.

SM Investments said its portfolio investments contributed 10% to the company’s net earnings in the first six months. Some of the company’s other portfolio investments are in mining firm Atlas Consolidated Mining and Development Corp., real estate developer Belle Corp., and bakeshop Goldilocks.

SM Investments has business interests in retail, banking, and property.

In the first half, SM Investments logged a 32% jump in its net income to P36.5 billion from P27.7 billion a year ago on the back of higher revenues.

2G0 posted a turnaround in its profits to P312 million in 2022, carried by a 25% increase in its revenues to P19.3 billion, amid the lifting of movement restrictions and the country’s economic reopening. 

Meanwhile, SM Investments said that the increase in PGPC’s geothermal energy production aligns with the listed firm’s sustainability agenda as it would provide steam to power plants that would go to various communities.

“We are picking the businesses that add to the ecosystem of SM Investments. It’s about creating value and growth,” Mr. Daniels said. 

Shares of SM Investments at the local bourse fell 50 centavos or 0.06% to finish at P826.50 apiece. — Revin Mikhael D. Ochave