Celebrating Success: SM Investments Corporation Shines in the First Half of 2024

COURTESY: SM Investments Corporation

Pasay City, Philippines, is buzzing with excitement as SM Investments Corporation (SM Investments) has reported remarkable financial performance for the first half of 2024. With a 10% increase in consolidated net income, SM Investments has demonstrated its resilience and adaptability in a dynamic economic environment. The company’s net income soared to PHP40.2 billion, up from PHP36.5 billion in the same period last year. This impressive growth is a testament to the strategic vision and execution capabilities of SM Investments.

The second quarter of 2024 was particularly noteworthy for SM Investments. The company achieved a 13% growth in net income, reaching PHP21.8 billion. This robust performance was driven by improved discretionary spending, which significantly boosted retail sales. The company’s consolidated revenues for the first half of 2024 rose by 5% to PHP301.4 billion, up from PHP286.7 billion year-on-year. In the second quarter alone, revenues grew by 6% to PHP157.7 billion.

Breaking down the contributions to the total net earnings, the banking sector accounted for the largest share at 50%. Property contributed 27%, while retail accounted for 14%, and portfolio investments made up 9%. This diversified revenue stream underscores the strength and balanced growth of SM Investments across various sectors.

Frederic C. DyBuncio, President and Chief Executive Officer of SM Investments, expressed cautious optimism for the remainder of the year. He highlighted the positive environment for the company’s businesses and the improved discretionary spending that lifted retail sales in the second quarter. Mr. DyBuncio’s insights reflect a strategic approach to navigating the economic landscape, ensuring sustained growth and profitability.

One of the highlights of the first half of 2024 was the successful issuance of Euro Medium-Term Notes (EMTN). On July 18, SM Investments priced a USD500 million drawdown from its USD3 billion EMTN program, now listed on the Singapore Exchange Securities Trading Limited. This issuance, which was 3.2 times oversubscribed with final demand reaching USD1.6 billion, marked SM Investments' largest offshore bond issuance since 2014. Mr. DyBuncio expressed satisfaction with the demand and positive feedback on the issuance, highlighting the quality of SM Investments' financials and the investability of strong Filipino companies.

The banking sector, a significant contributor to SM Investments' net earnings, showed strong performance in the first half of 2024. BDO Unibank, Inc. (BDO) posted net earnings of PHP39.4 billion, a 12% increase year-on-year. This growth was driven by stronger momentum from its core intermediation and fee-based service businesses. Similarly, China Banking Corporation reported a record net income of PHP11.4 billion, up 6% compared to the same period last year, fueled by stronger core lending and deposit-taking activities.

SM Retail experienced a slight dip in net income, standing at PHP7.6 billion in the first half of 2024, down from PHP8.4 billion last year. This decline was due to a high base effect from the lifting of mobility restrictions on consumption in 2023. However, retail revenues grew by 4% to PHP196.9 billion from PHP188.5 billion. The second quarter reflected higher growth with a 6% increase in retail revenues and a 2% rise in net income, indicative of spending on discretionary items such as appliances, beauty, and fashion. Specialty retail revenues increased by 5%, and food retail revenues grew by 7%.

SM Prime Holdings, Inc., the property arm of SM Investments, reported a 13% increase in consolidated net income, reaching PHP22.1 billion in the first half of 2024, up from PHP19.4 billion in the same period last year. This growth was driven by the strong performance of its real estate ventures and continued demand for residential and commercial spaces.

SM Investments Corporation's stellar performance in the first half of 2024 is a testament to its strategic vision, diversified revenue streams, and robust execution capabilities. With the leadership of Frederic C. DyBuncio and the company's cautious optimism, SM Investments is well-positioned to navigate the challenges and opportunities that lie ahead. As Pasay City continues to thrive, SM Investments remains a beacon of growth, resilience, and success in the Philippines.