PROFITS of SM Investments Corp. (SMIC) dropped 16% to P9 billion in the first quarter, pulled by income declines in its retail, property and banking segments.

In a statement Thursday, the holding company of the SM Group said the ongoing coronavirus disease 2019 (COVID-19) pandemic has negatively affected its profitability, as the enhanced community quarantine (ECQ) limited its operations.

Consolidated revenues grew to P111.12 billion for the quarter, improving from P109 billion in 2018. But mall closures and other ECQ-related disruptions dragged SMIC’s bottomline.

Per segment, banking made up 46% of SMIC’s net income, property comprised 44%, and retail accounted for the remaining 10%.

BDO Unibank, Inc. generated a net income of P8.8 billion, falling from P9.8 billion in the same quarter the previous year. This was somewhat tempered by China Banking Corp., which generated a 19% increase in earnings to P2.2 billion during the period.

Property arm SM Prime Holdings, Inc. posted 5% lower net income at P8.3 billion during the three months. Its revenues fell 3% to P25.8 billion as malls were closed due to COVID-19-related quarantine measures.

SMIC said mall operations made up 47% of SM Prime’s consolidated revenues, therefore the forced mall closures negatively affected its earnings. Revenues from Philippine malls fell 16% to P11.3 billion, while total mall rental income fell 12% to P10.1 billion.

The residential unit of SM Prime under SM Development Corp. softened the impact of the declining mall business by growing revenues 23% to P11.4 billion. This segment made up 44% of SM Prime’s topline, which improved due to reservation sales worth P24.8 billion.

Other business segments under SM Prime recorded consolidated revenues of P2.2 billion.

Retail segment SM Retail, Inc. slumped 56% to P1.2 billion. Under this segment are food-related units SM Markets, WalterMart and Alfamart, and non-food units The SM Store and Specialty Retail. Consolidated revenues from this segment increased 3% to P81 billion.

“The ECQ and broader pandemic started to weigh on our performance during the first quarter,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said in the statement.

Despite the weak first quarter turnout, SMIC said its balance sheet is strong enough to give it flexibility to adapt to changing customer needs and behaviors.

“We are actively enhancing digital and delivery services across all our core businesses, while also working to support and protect our employees, customers, MSMEs (micro-, small- and medium-sized entrepreneurs) and business partners,” Mr. DyBuncio said.

SM has started gradually opening its mall network over the weekend for areas where quarantine measures have been relaxed by the government.

Shares in SMIC at the stock exchange gained P15 or 1.83% to P835 each on Thursday. — Denise A. Valdez