Retail declines as SM Investments' Q1 net income rises by 6% to P18.4 billion

SM Investments Corp (SMIC), one of the Philippines' largest conglomerates, posted a 6% increase in net income for the first quarter of 2024. The company reported earnings of ₱18.4 billion, up from ₱17.3 billion in the same period last year, driven by higher revenues across its business segments.

Revenue Growth and Contributions

The conglomerate's consolidated revenues rose by 4%, reaching ₱144 billion between January and March. A substantial portion of earnings came from its banking sector, which contributed 52% of core net earnings:

• BDO Unibank, the country’s largest bank, posted a 12% increase in net income, amounting to ₱18.5 billion.

• China Banking Corp. also saw an 18% increase, with net income climbing to ₱5.9 billion.

Strong Performance in Property Division

The group’s property arm, SM Prime Holdings, recorded a 11% growth in consolidated net income to ₱10.5 billion, further strengthening the conglomerate's financial position. As the Philippines' largest mall operator, SM Prime has benefited from increased foot traffic and retail activity, reflecting the country’s post-pandemic recovery.

Challenges in Retail

Despite the positive trends, SM Retail faced headwinds, with net income declining to ₱3.1 billion from ₱3.9 billion during the same quarter last year. This drop underscores shifting consumer spending habits and the challenges of navigating competitive retail landscapes.

CEO’s Optimism and Outlook

SMIC's president and CEO, Frederic DyBuncio, highlighted the company’s ability to adapt to evolving consumer priorities, driven by the country’s underlying economic growth. “We continue to benefit from the country's economic momentum and have aligned our strategies to reflect changing spending habits,” DyBuncio stated.

DyBuncio also expressed a "cautiously optimistic" outlook for the year, emphasizing that SMIC’s expansion is progressing as planned.

Looking Ahead

As SMIC moves forward, its diversified portfolio across banking, property, and retail positions it to capitalize on the Philippines’ economic recovery and growth opportunities. The company’s ability to balance strong gains in certain sectors while addressing challenges in others underscores its resilience and strategic foresight.