Strong consumer confidence propels SMIC’s income to P36.5B — CEO

SM INVESTMENTS Corp. (SMIC) reported on Wednesday a consolidated net income of P36.5 billion for the first half, reflecting a 32% increase from P27.7 billion in the same period last year.

The results were “driven by solid consumer sentiment on the back of a positive economic environment,” SMCI President and Chief Executive Officer (CEO) Frederic C. DyBuncio said in a statement.

“Our performance was driven by fundamental demand, without the added benefit of post-pandemic ‘revenge spending’ that contributed to last year’s results,” he added.

He noted that the robust consumer confidence was also tied to low unemployment and better inflation environment, setting a strong base for the rest of the year.

The company’s consolidated revenues increased by 18% to P286.3 billion from P242.6 billion in the previous year.

The company’s total net earnings for the six-month period came from retail, accounting for 17%; property, accounting for 26%; banking, which made up the bulk at 47%; and portfolio investments, contributing 10%.

SM Retail, Inc. recorded a 21% increase in net income for the period, amounting to P8.4 billion from P7 billion, with revenues also rising by 15% to P188.9 billion from P164.3 billion.

These gains were attributed to increased shopping activity, buoyed by improved employment conditions.

“Consumer spending was notably strong in discretionary categories such as fashion, dining out, and entertainment, reflecting increased spending power on lifestyle and experiences, underpinned by stronger consumer confidence,” Mr. DyBuncio said.

Revenues from department stores grew by 27%, specialty retail also increased by 18%, and its food retail segment grew by 10%, boosted by Alfamart reporting a 26% increase in revenue.

As of June 2023, Alfamart had a total of 1,528 stores, while SM Retail and its affiliates added 174 stores, bringing the total retail network to 3,677 stores.

SM Prime Holdings, Inc. reported a consolidated net income of P19.4 billion for the first half, marking a 37.6% increase from P14.1 billion.

This growth was driven by a 29% increase in revenues, reaching P31.2 billion from P22.5 billion last year.

The company’s banking segment, BDO Unibank, Inc., saw a net profit increase to P35.2 billion in the first half.

Net interest income advanced to P89.5 billion, supported by an 8% rise in gross customer loans to P2.7 trillion, while deposit liabilities increased by 12% to P3.3 trillion.

Meanwhile, China Banking Corp. reported a net income of P10.8 billion, marking a 7% improvement compared to the previous year. Its net interest income increased by 16% to P25.5 billion, as its overall income countered the rise in interest expenses.

The company’s portfolio investment contributed 10% to its consolidated net income for the period.

SMIC shares closed 0.56% higher at P900 apiece on Wednesday. — Adrian H. Halili