SM Investments Corporation (SM) reported a record net income in 2014 of PHP28.4 billion. Excluding extraordinary items, recurring net income grew 14.4%.
SM’s underlying earnings growth was mainly driven by BDO Unibank, Inc., which posted a core income growth of 18%. Together with China Banking Corporation, banks accounted for 41% of SM’s consolidated net income in 2014. Property contributed 38% and retail 21%.
The record 2014 consolidated net income of PHP28.4 billion compares with PHP27.4 billion in 2013. These include exceptional items such as trading gains from the group’s banking businesses.
Consolidated revenues grew 9% to PHP275.7 billion in 2014 from PHP253.3 billion in 2013. This was the result of a good retail sales environment which also boosted rental revenues in SM’s property business.
The total assets of SM grew 12% in the past year to PHP711.9 billion. SM maintains a very healthy balance sheet with a conservative gearing ratio of 34% net debt to 66% equity.
SM raised PHP15 billion in May 2014 from a public offer of peso-denominated retail bonds with maturities of 7 and 10 years. The SM bonds were rated Aaa by Philippine Rating Services Corporation, the highest rating assigned by the credit rating firm.
In June 2014, SM issued a USD350 million 10-year senior unsecured bond at a fixed rate of 4.875% per annum, a landmark transaction marking the longest-dated USD bond issued by SM and the company’s fourth USD bond issuance since 2009. The issuance earned SM the Region’s Best Borrower Award from Hong Kong publication Finance Asia.
“The group’s strong underlying earnings growth of 14.4% in 2014 was the result of solid performance and ongoing expansion in all our three core businesses. During the year we raised additional capital and entered into several strong partnerships, accelerating our investments for growth and ensuring we expand in line with our continuing optimism about the economic prospects of the Philippines,” SM President Harley T. Sy said.