SM Retail reported a first-half net income growth of 25% to Php2.8 billion from Php2.2 billion for the first half of 2009, resulting from greater operational efficiency and economies of scale due to further expansion, particularly of the food business under the SaveMore brand. This translates to an average net margin of 4.4% up from 3.9% the previous year. Total sales during the period amounted to Php63.4 billion for an increase of 12%. EBITDA for the retail group amounted to Php4.3 billion, for an EBITDA margin of 7%.
Of total retail sales, the non-food group contributed 42%, while the food group accounted for 58%. In terms of net income, the non-food group contributed 30% to the total, while the latter brought in 70%.
The solid growth in SM Retail can be linked to the country’s robust private consumption, driven to a large extent by OFW (overseas Filipino workers) remittances. Additional growth drivers include operational improvements and further expansion through new stores, among others.
Nine new stores were opened by SM Retail since the start of this year, bringing its total number of stores to 125. These consist of 37 department stores, 27 supermarkets, 31 SaveMore branches, 20 hypermarkets, and nine Makro outlets. For the rest of 2010, the SM retail group is scheduled to inaugurate three more department stores, three supermarkets, six SaveMore branches, and four hypermarkets.
