SM Investments sees 2010 net income rising 14%

ABS-CBN News

Posted at Aug 05 2010 09:55 AM | Updated as of Aug 06 2010 01:43 AM

* SM Investments 6-month net profit up 15% to P8.5 billion

MANILA, Philippines -  (UPDATE) Conglomerate SM Investments Corp. expects its net income to rise by 14% in 2010, fueled by faster growth in the economy, group financial officer Jose Sio said on Thursday.

The company had earlier estimated its net income would climb at least 10 percent this year.

"In view of what's happening to our country, it looks like as of now all people I talk to have a positive outlook for the second half," Sio told reporters.

"Therefore, we say we should be comfortable with 14% growth in net profit for the full year... historically, second half is stronger."

The conglomerate said  its net income in the first half rose by 15% from a year ago to P8.5 billion, driven by higher earnings of its core businesses.

Based on its reported first quarter net income of P4.8 billion, SM Investments net profit in the second quarter reached P3.7 billion.

The company owned by the country's richest businessman Henry Sy, said that its consolidated revenue went up by 15% to P85 billion from P74 billion in 2009.

"SM exceeded its growth targets, as all our core businesses rode on the strength of the Philippine economy. With a brighter economic forecast for the rest of the year, we are more confident of attaining our full-year objectives," Harley Sy, president of SM, said in a statement.

The economy grew at a faster pace in the first quarter at 7.3%, driven by government spending, improved exports and robust remittances from Filipinos working abroad, and which in turn, fueled consumption.

The biggest contributor to SM's bottomline is its retail operations, accounting for 35% of total net profit, followeed by banks and shopping malls with contributions of 28% and 24%, respectively. SM's real estate business plunked in 13%.

SM's retail operations posted a first half net profit growth of 25% to P2.8 billion.

Its mall unit, SM Prime Holdings posted a 10% rise in consolidated net income at P3.8 billion.

SM's banking unit, Banco de Oro Unibank Inc.'s net profit jumped by a hefty 94% to P4.1 billion.

Another bank, China Banking Corp., hiked its net profit by 8% from a year ago to P2.1 billion.

SM's real estate operations yielded a net profit of P1.7 billion in the six months to June, 39% more from last year.

SM shares were 0.9% higher in late  trade at P454 a piece on Thursday. with a report from Reuters