PASAY CITY, PHILIPPINES, 07 Aug. 2024—SM Investments Corporation (SM Investments) announced a 10% increase in consolidated net income for the first half of 2024, reaching PHP40.2 billion, compared to PHP36.5 billion in the same period last year. This growth includes a 13% rise in net income in the second quarter, totaling PHP21.8 billion.

Consolidated revenues climbed by 5% in the first half to PHP301.4 billion, up from PHP286.7 billion year-on-year. Second-quarter revenues increased by 6% to PHP157.7 billion.

“SM’s double-digit growth in the first half demonstrates a favorable business environment. Increased discretionary spending in the second quarter boosted retail sales, while our banks, property, and portfolio investments continued to perform well. We remain cautiously optimistic for the rest of the year,” stated SM Investments President and CEO Frederic C. DyBuncio.

Of the total net earnings, banking contributed the largest share at 50%. Property accounted for 27%, retail for 14%, and portfolio investments for 9%.

“We were also pleased with the demand and positive response to our recent maiden Euro Medium-Term Notes issuance, underscoring the quality of our financials and the attractiveness of strong Filipino companies,” Mr. DyBuncio added.

On July 18, SM Investments issued 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.

Retail

SM Retail’s net income was PHP7.6 billion in the first half, down from PHP8.4 billion last year, due to a high base effect from the impact of the lifting of mobility restrictions on consumption in 2023. Revenues grew 4% in the first half to PHP196.9 billion from PHP188.5 billion. The second quarter showed higher growth, with retail revenues up by 6% and net income up by 2%, reflecting spending on discretionary items such as appliances, beauty, and fashion. Specialty retail revenues increased by 5%, while food retail revenues grew by 7%. SM Retail added 355 stores in the first six months of 2024, expanding its total retail network to 4,208 stores.

Property

SM Prime Holdings, Inc. reported a 13% increase in consolidated net income to PHP22.1 billion in the first half, up from PHP19.4 billion in the same period last year. Consolidated revenues grew 8% to PHP64.7 billion from PHP59.9 billion. SM Prime’s mall business, which accounted for 58% of consolidated revenues, grew 8% to PHP37.5 billion, with mall rental revenues increasing by 9% to PHP32.1 billion. The primary residential business accounted for 29% of consolidated revenues, with an 8% increase in revenues to PHP18.9 billion. Reservation sales stood at PHP40.2 billion. Other business segments, including offices, hotels, and convention centers, saw a 13% growth in revenues to PHP7.0 billion.

Banking

BDO Unibank, Inc. (BDO) posted net earnings of PHP39.4 billion in the first half, a 12% increase year-on-year, driven by stronger momentum from its core intermediation and fee-based service businesses. Net interest income rose 11% to PHP99.6 billion. Gross customer loans expanded by 13% across all market segments, while total deposits rose by 13%. Asset quality remained stable despite elevated interest rates, with a Non-Performing Loan (NPL) ratio of 2.06% and NPL coverage of 169%, better than the industry average. The bank issued its third ASEAN Sustainability Bonds on July 24, 2024, raising PHP55.7 billion to finance and/or refinance eligible projects to support the country’s sustainable development.

China Banking Corporation reported a record net income of PHP11.4 billion in the first half, up 6% from the same period last year, driven by stronger core lending and deposit-taking activities. Net interest income increased by 19% to PHP30.4 billion as higher interest income offset rising interest expenses. Gross loans rose by 10% to PHP817 billion due to strong demand across market segments. Deposits grew faster than the industry average, reaching PHP1.3 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 a net income increase to PHP2.07 billion, while revenues grew 23% to PHP12.5 billion due to higher copper metal prices. The Philippine Geothermal Production Company, Inc. (PGPC) recently began exploring and developing new geothermal energy sources in various parts of Luzon, contributing to power security for the region and supporting the country’s renewable energy goals. 2GO Group, Inc. (2GO) launched new passenger vessels, 2GO M/V Masigla and 2GO M/V Masikap, in the second quarter, serving routes from Manila to destinations in the Visayas and Mindanao. Additionally, both vessels will carry containerized freight and rolling cargo for businesses and consumers.

Balance Sheet

Total assets of SM Investments increased by 1% to PHP1.6 trillion. The gearing ratio remained conservative with 33% net debt to 67% equity.

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About SM Investments Corporation

SM Investments Corporation is a leading Philippine company with investments in market-leading businesses in retail, banking, and property. It also invests in ventures that capture high growth opportunities in the emerging Philippine economy. SM’s retail operations are the country’s largest and most diversified, consisting of grocery stores, department stores, and specialty retail stores. SM’s property arm, SM Prime Holdings, Inc., is the largest integrated property developer in the Philippines, with interests in malls, residences, offices, hotels, convention centers, and tourism-related property developments. SM’s banking interests include BDO Unibank, Inc., the country’s largest bank, and China Banking Corporation, the fourth-largest private domestic bank.

For more information, please visit www.sminvestments.com. For inquiries, please contact: smic_corpcomm@sminvestments.com