SM Investments Corp., the investment holding company of the Sy Group, said Wednesday net income grew 25 percent to P77 billion in 2023, driven by steady economic growth, a robust banking sector, and strong consumer spending.
Consolidated revenue increased 11 percent to P616.3 billion last year from P553 billion in 2022.
“SM’s performance as a group last year reflected our ability to stay close to our customers and address their needs regardless of uncertain economic conditions,” said SM Investments president and chief executive officer Frederic C. DyBuncio. “A key success driver was the healthy spending habits of Filipino consumers in both essential and discretionary purchases, particularly in fashion, dining and entertainment,” he added.
Banking, represented by BDO Unibank and China Banking Corp., provided the largest contribution at 47 percent of SM Investment’s net income. Property accounted for 25 percent, retail contributed another 19 percent and portfolio investments delivered 9 percent.
SM Retail Inc., which consists of grocery, department store and specialty retail, reported a 10 percent expansion in revenue to P415 billion while net income increased 11 percent to P19.9 billion.
As essential spending proved steady, revenue from SM’s Food Group–SM Markets, WalterMart and Alfamart–grew 7 percent, which contributed almost half of total retail revenue growth. With continuing efficiencies in operations, net income for the food segment increased 21 percent. SM Store revenue increased 16 percent and specialty retail revenue grew 11 percent, driven by spending on fashion, health and beauty, pets, toys and other discretionary expenses.
SM continued to expand its retail footprint to a total 3,853 retail outlets at the end of 2023. Of the total 419 new stores opened during the year, 89 percent were located in provincial areas, reflective of SM’s strategy to tap into growth opportunities in emerging cities in the regions.
Property arm SM Prime Holdings posted a P40 billion consolidated net income in 2023, up 33 percent. Consolidated revenue rose 21 percent to P128.1 billion, with 56 percent coming from mall operations. SM’s residential business, led by SM Development Corp., increased its revenue haul by 8 percent to P43.1 billion, with reservations reaching P102 billion translating to more than 21,000 residential units sold in 2023.
BDO delivered net income of P73.4 billion in 2023 while China Bank recorded net income of P22 billion. Both gained from growth in net interest income.
The share of the net earnings of its portfolio investment companies grew 6 percent in 2023 driven by buoyant passenger volumes in 2GO’s shipping business, the leisure and entertainment business of Belle Corp., and growth in Goldilocks Bakeshop.
“Our portfolio companies continue to present solid potential as we invest in emerging sectors that positively impact the economy,’’ DyBuncio said. He also said portfolio investments will help drive growth in the coming years with the planned expansion of 2Go and Goldilocks.
DyBuncio said SM Investments remains “cautiously optimistic” of its prospects this year, with concerns more caused by external events like geopolitical tensions hurting supply chains and global trade.
“But as long as consumer spending stays strong and the economy stays strong, we will grow,” he said.
