Pasay–(PHStocks)–Philippine conglomerate SM Investments Corp. (PSE: SM) reported a 15% growth in net income for 2011 of PhP21.2 billion from PhP18.4 billion last year. Consolidated revenues increased by 13% to PhP200.7 billion, compared with PhP177.2 billion in 2010. SM’s healthy revenue and profit growth during the year was a result of the strong performance by its core businesses.
SM President Harley T. Sy said, “2011 proved to be a favorable year for SM, as it was able to continue delivering positive results and increased challenges in the external environment. This was achieved through the focused efforts displayed by the hard working men and women behind the whole SM organization. We also take comfort in the firm support and unfailing patronage of our customers, shareholders, and other stakeholders. Such support behind us makes us look to 2012 with added optimism in sustaining SM’s growth and expansion.”
Net Income Profile
Among SM’s core businesses, banks gave the most to the company’s 2011 profits, with a 31.1% contribution. The retail group came in second with 30.2%, followed by shopping malls and real estate, which contributed 23.5% and 15.2%, respectively.
BDO reported a net income of PhP10.5 billion in 2011, up 19% compared to PhP8.8 billion in 2010. BDO’s loan portfolio grew 24% to PhP670.1 billion by focusing on creditworthy borrowers in fast-growing industry sectors. Total deposits increased 10% to PhP858.6 billion. Recurring fee-based income rose 18% to PhP12.3 billion. Operating expenses grew moderately at 4% to Php36.3 billion. BDO’s non-performing loan (NPL) ratio further declined to 3.4% from 4.7% in 2010. The bank’s capital adequacy ratio (CAR) improved from 13.8% in 2010 to 15.8%. The full year 2011 results brought in enhanced shareholder returns, with return on equity at 11.7%.
China Bank posted a consolidated net income of PhP5.0 billion for full year 2011, translating to a creditable return on equity of 13.7% and a return on assets of 2%. The bank’s gross loan portfolio grew by 32% to PhP150 billion, with its NPL ratio improving to 2.9% in 2011 from 3.9% in 2010.
Total resources amounted to PhP262.2 billion while total deposits reached PhP216.1 billion. China Bank’s total capital funds reached PhP39.3 billion in 2011, 10.8% more than in 2010. Its financial position remains solid with a CAR of 17.8%.
SM Retail reported a full year 2011 net income of PhP5.8 billion, up 3% compared to 2010. Total sales for the group grew 9% to PhP148.2 billion. Its continued expansion, particularly through new SaveMore branches, remains a key driver of the group’s performance as another 25 new branches were opened in 2011 from 14 the previous year.
SM Retail opened 34 new stores in 2011, for a total number of 169 stores by the end of the year. The total consists of 41 department stores, 33 supermarkets, 65 SaveMore branches, and 30 hypermarkets.
Store expansion in 2012 will continue to focus on the provinces for the anchor stores located in the malls, while SaveMore will see its number of stores growing by 30 to 40 stores nationwide.
SM Prime Holdings Inc. (PSE: SMPH) reported a 15% increase in consolidated net income to PhP9.1 billion for the full year 2011, as compared to PhP7.9 billion in 2010. Total revenues for the period rose by 13% to PhP26.9 billion. These results include the operations of the four SM malls in China, which are located in the cities of Xiamen and Jinjiang in Southern China, Chengdu in Central China, and Suzhou in Eastern China.
SM Prime’s better than expected performance was brought about by a mix of expanded capacity from new malls in the Philippines that opened in 2010 and 2011, and a very healthy same-store rental growth of 7%. In addition, SM Prime’s four shopping malls in China sustained their robust growth, with net income doubling to PhP889 million in 2011, from PhP428 million in 2010. A tighter grip on operating expenses through the use of innovative energy conservation methods likewise contributed to the company’s rise in profits.
For full year 2011, SM Prime’s consolidated rental revenues contributed 85% to the company’s total revenues, and grew by 14% to PhP22.8 billion.
SM Development Corporation (PSE: SMDC) posted a consolidated net income of PhP4.18 billion in 2011, increasing sharply by 38% from PhP3.02 billion in 2010. Consolidated revenues amounted to PhP16.92 billion, higher by 69% year-on-year, mainly derived from real estate operations. The market continues to show strong acceptance of the company’s SM Residences and M Place products, thereby fueling SMDC’s notable 2011 results. SMDC currently has 15 residential projects under its SM Residences brand and two projects under the M Place brand. For the rest of 2012, five more new residential condominium projects will be launched in Metro Manila.