Category: SM Investments Corporation

SM Marks 10th Listing Anniversary, cites Tremendous Growth

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SM Investments Corporation (SM) marked its 10th year as a publicly-listed company in the Philippine Stock Exchange.

SM listed on March 22, 2005 with an adjusted price of PHP 191 per share. As of March 26, SM closed at PHP888 apiece, representing a growth of 365%.

In his remarks during the anniversary ceremony, SM Chief Finance Officer Jose T. Sio said that the company’s growth has been tremendous over the last ten years.

“More compelling is how our operating companies in retail, property and banking have emerged to be market leaders in just ten years. Such leadership is backed by having one of the largest footprints in the country consisting of highly productive assets and delivering superior value, margins and returns. These assets have evolved to cater to more sophisticated lifestyles of our customers by providing a world-class look and feel, a sense of completeness and an exciting experience for every member of the family,” Mr. Sio said.

In 2005, SM had total assets of PHP153 billion and a market capitalization of PHP127 billion. Today, , SM’s assets are worth over PHP711 billion with a market capitalization of PHP732 billion. Its assets grew almost seven -fold, delivering an average annual growth of 21% over the last ten years. Market capitalization grew by 19% during the same period.

Revenues also accelerated in the last ten years for an average growth of 20.6% per annum with net income showing an average growth of 21.4 percent each year.

“Indeed, the story of SM has inspired and surprised many, ourselves included, as we witnessed its phenomenal growth from humble beginnings to what it has become today. SM is a story of leadership, innovation, commitment, focus and a collective effort to advance the great legacy that Mr. Henry Sy, Sr. built,” Mr. Sio further said.

SM Posts 14.4% Growth in Recurring Net Income in 2014

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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.

SM Urges Companies to Tap into Opportunities from ASEAN Integration

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From L-R Lanny Batac, SME Wireless Head;  Enzo Tanedo, Product Head of PLDT SME Nation; Jecyn Chua-Teng, PLDT SME Nation Business Head; Joe Magsaysay, President & CEO, Cinco Corp. & Potato Corner; Cora Guidote, SVP for Investor Relations and Corporate Communications at SM; Laura de Bertotto, CEO of VMV Limited and Roberto Claudio, Sr. Chairman, Toby’s Sports 

As the integration of economies of ASEAN’s 10 member nations approaches in 2015, SM Investments Corporation (SM) is encouraging companies to tap into the opportunities it will bring.

During a forum of PLDT SME Nation’s Future Talks entitled, “Ready for 2015: Future-Proofing SMEs for the Asean Economic Community”, Corazon Guidote, SM Senior Vice President for Investor Relations and Corporate Communications said that Philippine companies should have the proper mindset in facing the forthcoming integration.

“I believe that the greatest thing holding many entrepreneurs back in this country is the mindset. Many of them are still scared to go out and explore, to grow, and become bigger. As a matter of fact, I get many comments saying, SM is so large now. But from the ASEAN perspective, more so, in the Asian region, we hardly figure in the top 50 companies. This is why we have to constantly focus on being global and benchmarking ourselves with global companies,” Guidote said.

She said that among the greatest challenges companies face are as follows: strong resistance to change, complacency, thinking small, staying in the status quo, misinformation, the lack of financial discipline, governance and transparency.

Philippine companies need to keep a keen eye out for opportunities that the ASEAN integration will bring such as bigger markets, new technology and partnerships. Companies also need to keenly observe the characteristics and business models that successful companies, both here and ASEAN, possess and adopt.

In retail for instance, which is a core business of SM established by Henry Sy Sr. in the late 1950s, many ASEAN brands have come into the malls such as the likes of JCo Donuts & Coffee of Indonesia , and Bread Talk from Singapore to name a few. Shoes and bag brands like Charles & Keith of Singapore and VNC/Vincci from Malaysia are also setting up additional stores with the mall’s own expansion.

The malls have also adopted a “big brother” role, housing homegrown brands that have also flourished with the growth of the malls in the country such as Jollibee, Bench, National Bookstore, CD-R King, Toby’s, Kultura and Our Home to name a few. A number of fast retailers and franchisors have also been successful such as Filipino franchising stores Bibingkinitan and Mango-Ong which brought in traditional products in new, hygienic and affordable concepts that mainstream Filipinos embraced.

Such brands have offered refreshing concepts and have evolved over the years to cater to the needs and preferences of the market which have allowed them to be resilient and compete with the influx of new brands coming into the malls.

“SM chooses tenants and suppliers for the concepts they bring to our world. They keep our malls and stores fun, new and exciting. It doesn’t matter if they are known or not. The best concepts bring uniqueness and an element of surprise not just to us, but most importantly, to our customers,” she said.

“As we approach 2015, SM is enjoining local companies to explore, learn and harness the opportunities that economic integration brings,” Guidote said.

ASEAN member nations are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

SM Supports 23rd World Economic Forum

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Philippine conglomerate SM Investments Corporation is a partner of the 23rd World Economic Forum on East Asia (WEF-EA) to be held from May 21 to 23, 2014 in Manila.

Headquartered in Geneva, WEF is a private-led international institution that aims to improve the state of the world through public-private cooperation in the spirit of global citizenship.

This is the first time that the Philippines will host the regional forum for East Asia. WEF cited the Philippines as “writing one of the greatest economic comeback stories in recent years”. The Philippines is poised to be the strongest performing Southeast Asian economy in 2014, with GDP growth projected to surpass 6.5%.

“The Philippines continues to provide great opportunities for investments. We have been committed investors in the country for over five decades. The WEF will further highlight the opportunities that the emerging Philippines offers. We look forward to the discussions which will uncover more opportunities in the region,” SM Vice Chairperson Teresita Sy-Coson said.

The WEF event will serve as an ideal platform for participants to deliberate the opportunities of the ASEAN Economic Community to promote greater inclusion across East Asia and to instil more resilient decision-making in the face of unpredictable economic and natural disruptions.

WEF noted that ASEAN is one of the fastest-growing regional economies in the world, and is one year away from launching the ASEAN Economic Community, a common market which will comprise 600 million people and have a combined GDP of nearly US$ 2 trillion. It further noted that fresh demand in Europe and the United States, along with recently concluded trade agreements, are expected to boost production and consumption in East Asia. Almost all of the 10 ASEAN economies are expecting growth above 5% in 2014.

In parallel with the WEF regional meeting, SM and BDO Unibank, Inc. are also joint gold sponsors in the 10th ASEAN Finance Ministers’ Investors Seminar (AFMIS), a key gathering hosted by the Philippine government on May 20, 2014. This year, the AFMIS aims to tackle ASEAN’s growth prospects, the ongoing initiatives of the ASEAN Finance Process to the ASEAN Economic Community, and the milestones and investment opportunities for individual economies and various country sectors. The AFMIS is held yearly since 2004 to promote ASEAN as an investment destination.

SM for its part is strongly committed to the Philippines, having established a foothold in the retail, property and banking businesses for over 50 years. The company continues to invest heavily in these sectors while it hones other investments to achieve sustainable growth and support the country’s development footprint.

ASEAN Business Advisory Council Philippines to unveil first ASEAN Business Awards

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The ASEAN Business Advisory Council (ASEAN BAC) Philippines will launch the first ever ASEAN BAC Business Awards (Awards) that will recognize Filipino businesses that have been strengthening their ASEAN footprint and competitiveness.

An official ceremony will be held on April 29, 2014 at the Manila Peninsula, Rigodon Ballroom at 12:00 noon. ASEAN BAC Philippines led by Teresita Sy-Coson, Vice Chair for SM Investments Corporation; and Jay Yuvallos, President of Interior Basics will be signing a Memorandum of Understanding with the Management Association of the Philippines (MAP), Philippine Chamber of Commerce and Industry (PCCI), Philippine Exporters Confederation, Inc. (Philexport), Financial Executive of the Philippines (FINEX), and the Asian Institute of Management (AIM) in launching the awards program.

The Awards aim to recognize outstanding Philippine enterprises that promote competitiveness of local entrepreneurs and their ability to explore and harness the opportunities that the ASEAN Economic Community offers. The award is ASEAN-BAC Philippines’ flagship program for 2014 to help drive awareness on the AEC which is set to roll out in 2015.

The signing ceremony will formally launch the ASEAN Business Awards Philippines application period. Interested companies and enterprises may visit www.asean-bac.org to apply, while details of the application guidelines and mechanics may be viewed at www.aseanbac.ph. Inquiries may also be coursed through the ASEAN BA Philippines secretariat at abasecretariat@aseanbac.ph. Inquiries may also be coursed through the ASEAN BA Philippines secretariat at abasecretariat@aseanbac.ph. Deadline for submission of nominations is on June 15, 2014.