Sustaining growth, Charting new opportunities

Published in Finance Asia, Autumn 2018 Issue

SM Investments Corporation is delivering solid results on the back of its market-leading position and strategic investments in high-potential sectors, mapping out new growth opportunities in step with the Philippines’ sustained economic expansion

SM Investments Corporation (SM), one of the Philippines’ top conglomerates, is well placed to capture the country’s sustained economic expansion with its solid track for success and market-leading investments in retail, property, and banking.

From a 60-year-old brand that traces its roots to the first shoe store of founder Henry Sy, Sr. in downtown Manila in 1958, SM has evolved into a core business group of retail, property and banking to recently added complementary businesses that enhanced the company’s reliable returns to investors and shareholders.

Delivering solid results

SM generated strong cash flows in 2017 and reported a 6% growth in net income to PHP32.9 billion while consolidated revenue increased 9% to PHP396.1 billion. The growth reflected the company’s strong performance in its core businesses in retail through SM Retail, Inc., property through SM Prime Holdings, Inc. and banking through BDO Unibank, Inc. and China Banking Corporation. The Group benefited from the country’s strong economy, resilient consumer sentiment and robust private and domestic consumption. These enabled the company to achieve steady profits across its core businesses anchored on a strong and sustainable business model, responsible management, good corporate governance and continued focus on building long-term value across its diversified portfolio.

Charting new growth opportunities

“The Philippines’ robust economic expansion gives SM further momentum to chart new growth opportunities. As we continue to focus on our main lines of business, we also recognize that the economy is evolving rapidly and our recent investments in new sectors are poised to meet the changing market needs,” said SM President & CEO Frederic DyBuncio.

SM continues to invest in high-potential growth sectors to create value and accelerate expansion for the Group. 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.

In 2017, SM invested in 2GO Group, Inc., the country’s largest end-to-end logistics solutions provider and in Philippines Urban Living Solutions, Inc. (PULS), the developer and operator of lifestyle dormitory chain, MyTown. These are expected to fuel higher growth in the future which should complement solid returns from SM’s core businesses.

“SM aims to unlock the value of the companies under its equity portfolio. We believe in developing highly competitive partners, supporting them with resources and skills to realize their potential,” said Mr. DyBuncio. “The Group is optimistic about the country’s economic prospects and is constantly looking into new growth opportunities for continued success.”