SM Investments Corporation: Sustaining Growth, Investing in new opportunities

 as Published in Business Times, Singapore – 30 July 2018

SM Investments Corporation (SM) is pushing ahead with a solid growth track amid its expanding domestic footprint in the Philippines and leadership presence across its core businesses.

A key conglomerate in the Philippines, SM is committed to be the country’s partner in growth and development through its market-leading investments in retail, property, and banking and strategic investments in high-potential sectors.  The group is constantly on the lookout for new opportunities to sustain its growth and long-term aspirations.

“We continue to build on our strong 2017 performance with revenues rising faster in the first quarter of this year,” says SM President and CEO Frederic C. DyBuncio.   SM recorded robust performance in 2017 with consolidated revenue growth of 9% to PHP396.2 billion (SGD10.6bn) and a consolidated net income of PHP32.9 billion (SGD0.9bn).  In the first quarter of 2018, SM posted consolidated net income growth of 10% to PHP8.5 billion (SGD0.2bn) while consolidated revenues rose 11% to PHP94.9 billion (SGD2.4bn).

SM’s strong cash flows and healthy balance sheet reinforce the Group’s ability to pursue aggressive expansion and scale new opportunities over the medium term.  The group continues to benefit from the strong Philippine economy which remains to be one of the top performing economies in Asia.  These enabled the company to achieve steady profits across its core businesses anchored on a strong and sustainable business model, good corporate governance, and continued focus on building long-term value across its diversified portfolio.

Strong brand                                               

This year, SM founded by Henry Sy, Sr., marks its 60th year since the launch of its first shoe store in downtown Manila in 1958.  From its humble beginnings, SM today has evolved into one of the leading conglomerates in the Philippines.

Today, SM’s retail footprint enjoys leadership by constantly introducing innovative retailing concepts and exciting merchandise.  It continues to pursue nationwide expansion across multi-formats led by growing mid-size stores and rapidly expanding minimart format.

SM’s retail business is spread across its department store business under THE SM STORE, supermarket business through SM Markets, and other food formats such as WalterMart and Alfamart.  Its specialty retailing, which includes Ace Hardware, Toy Kingdom, Baby Co., Kultura, Watsons, Our Home, Crate & Barrel, Forever 21, and Uniqlo among others, continues to deliver high margin growth in the company’s retail portfolio.

Apart from its retail businesses, SM is also largely invested in property through SM Prime Holdings, Inc. which holds interests in offices, hotels and convention centers, leisure or tourism-related properties, and residences through SM Development Corporation.  

In banking, SM owns BDO Unibank, Inc. and China Banking Corporation, the largest and sixth largest banks in the Philippines, respectively.

Charting new opportunities

SM’s growth momentum creates opportunities for increased penetration nationwide growing along with the country’s positive economic performance.

“Across the group, SM is confident about the positive track of the country’s economic growth. The Philippines remains a bright spot with strong fundamentals and we are here to support the country’s development agenda through our growing investments, especially in regional and under-penetrated areas.  Looking ahead, we remain cautiously optimistic about underlying consumption trends given inflationary pressures,” explains DyBuncio.

Aside from organic growth and strategic partnerships, SM in recent years has invested in complementary businesses that offer attractive financial returns. These equity investments include integrated resorts through Belle Corporation and community mall development through CityMall Commercial Centers.  

Last year, SM invested in 2GO Group, Inc., the Philippines’ largest end-to-end logistics solutions provider and in Philippines Urban Living Solutions, Inc. (PULS), the developer and operator of lifestyle dormitory chain, MyTown. 

“While we remain focused on our main lines of business, we also recognize that we are in a fast-changing economic landscape and challenging business environment.  Our recent investments in high-potential sectors are poised to meet the changing market needs,” says DyBuncio.  “These investments are expected to fuel higher growth in 2018 and should complement solid returns across the group.

“With every step, we remain committed to being a catalyst for growth and development in areas where SM and its subsidiaries are present.  This reflects our founder’s vision and the group’s dedication in improving the lives of millions we serve,” concludes DyBuncio.

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