SM Investments earmarks P40.6-B for 2010 capex

Posted at 04/28/10 3:20 PM

MANILA, Philippines (UPDATE) - SM Investments Corp. (SMIC) has allotted P40.6 billion for capital expenditures this year, bulk of which will go to property development and construction of new malls.

The conglomerate, which has a market capitalization of $5.5 billion, is owned by Henry Sy, the country's richest man. Its businesses include mall development, retail merchandising, leisure, real estate and banking.

SMIC president Harley Sy said they would spend P15 billion for property development, P12 billion for the construction of 5 shopping centers, P6.2 billion for new retail projects, P4.9 billion for hotel and convention developments, and P2 billion for bank operations.

Meantime, SMIC reported that its first-quarter net income rose by 14% to P4.8 billion from P4.2 billion a year ago as revenues grew 15% to P40.3 billion from P35.2 billion.

"We are off to a good start this year, given the very strong performance of all our core businesses. This reinforces our confidence in the country's continued economic recovery, one that can possibly sustain our growth momentum throughout the year," said Sy.

Of SMIC's operating units, Banco De Oro Unibank Inc. delivered the highest growth and contributed the most to the period's net income with a share of 32%. This was followed by retail merchandising and shopping malls, which contributed 29.2% and 25.5%, respectively. Real estate was next, with 13.2%.

The retail group reported a first-quarter net income of P1.1 billion, up 16% year-on-year, while total sales grew 15.3% to P29.4 billion

Mall operations, through SM Prime Holdings Inc., posted a 10% rise in consolidated net income to P1.9 billion from P1.7 billion. This year, SM Prime plans to open SM City Novaliches in Quezon City, SM City Tarlac, and SM City Calamba and SM City San Pablo, both of which will be in the province of Laguna. It will also open SM Suzhou in the fourth quarter of the year, its fourth mall in China.

Revenues from real estate operations for the first 3 months of 2010 also rose 32% to P3 billion, while net income grew 40% on strong contributions from residential unit SM Development Corp., as well as leasing activities of the commercial properties group, and the resort projects of Costa del Hamilo (Hamilo), SM's tourism vehicle.