By Arra B. Francia, Reporter

THE HOLDING FIRM of country’s richest man Henry Sy, Sr. clocked in a 6% growth in earnings in 2017, fueled by the continued expansion of its property, retail, and banking units.

In a statement issued Wednesday, SM Investments Corp. (SMIC) said net income grew to P32.9 billion last year, higher than its earnings in 2016. The growth comes amid a 9% increase in consolidated revenues to P396.1 billion.

“Our core businesses continued to deliver strong results in 2017 with recurring net income growth of 9%, driven by overall growth in the economy and our nationwide expansion plans. Our property and specialty retail businesses delivered particularly strong results,” SMIC President Frederic C. DyBuncio said.

SMIC has three core business interests, namely: property, banking, and retail, which contributed 40%, 38%, and 22% to its total earnings, respectively.

The property business, through SM Prime Holdings, Inc. (SM Prime), delivered a 16% uptick in recurring profit to P27.6 billion for the year, after posting a 14% increase in consolidated revenues to P90.9 billion.

SM Prime attributed the positive performance to the increase in rental revenues from malls, as it ended the year with 67 shopping malls in the Philippines covering a gross floor area (GFA) of 8 million square meters, (sq.m.) and seven more in China with a GFA of 1.3 million sq.m.

The property developer also noted strong sales take-up of housing units under SM Development Corp., pushing reservations sales 21% higher to P57.8 billion for the year.

Other than mall and housing, SM Prime also has office buildings, hotels, and convention centers under its portfolio.

BDO Unibank, Inc. said it penciled in a record-high profit for 2017, inching up 7% to P28.1 billion against the level booked in 2016. This was due to   efforts to expand the company’s lending, deposit-taking, and fee-based businesses. Gross customer loans amounted to P1.8 trillion, 18% up year on year, allowing net interest income to grow 25% to P81.8 billion.

SMIC’s other banking unit, China Banking Corp., generated P7.4 billion in 2017, 15% higher than what it reported in 2016. Deposits in the bank rose 17% to P635 billion due to the introduction of new branches, while gross loans climbed 17% to P454 billion.

For retail, the group reported a 7% increase in revenues to P297.4 billion, resulting to a net income of P10.4 billion. SM Retail, Inc. consists of The SM Store, specialty stores and SM Markets.

The company was able to open two new The SM Stores last year, located in SM CDO Downtown Premier and SM City Puerto Princesa, bringing its total department stores to 59 with a gross selling area of 760,000 sq.m.

On the other hand, SM Markets, which includes SM Supermarket, SM Hypermarket, and Savemore, added 42 new stores located mostly in the provinces last year. The company said it employs a multi-format growth strategy in a bid to address the lack of organized retail in various regions of the country.

SM Retail added 341 new outlets in 2017, bringing its retail business portfolio to 2,032 outlets, 59 of which are The SM Stores, 1,299 specialty retail outlets, 52 SM Supermarkets, 47 SM Hypermarkets, 181 Savemore, 46 Waltermart, and 348 Alfamart Stores.

“The underlying performance of our retail operations remained good, led by strong growth in our higher margin specialty retailing and with the addition of the successful Miniso variety store chain during the year,” Mr. DyBuncio said.

Sought for comment, Philstocks Financial, Inc. Head of Research Justino B. Calaycay, Jr. said the results were “disappointing” for SMIC.

“It’s rather slow actually… We expected a bit more, probably double-digit so this is a bit disappointing for SM. I think the share prices were active to it, dropping some 3% today. We expected it somewhere in the low double digits, within 10-15%,” Mr. Calaycay said in a phone interview yesterday.

Shares in SMIC gave up P30 or 3.09% to close at P940 each at the stock exchange on Wednesday.

“We are concerned about this moving forward, because of a lot of concerns like inflation might start to kick in. It might start to Impact on the purchasing power of consumers, so this will greatly affect the sales of SM malls,” Mr. Calaycay said.

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