SM Investments Corporation Reported a PHP 77 Billion Net Income in 2023, Up 25%

SM Investments Corporation (SMIC) reported that its net income increased by 25% to PHP 77.0 billion in 2023, up from PHP 61.7 billion in 2022. Consolidated revenues climbed by 11% to PHP 616.3 billion from PHP553.0 billion the previous year.

“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 patterns of Filipino consumers in both essential and discretionary purchases, particularly in fashion, dining and entertainment,” he added.
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Banking contributed the most to net income, accounting for 47%, followed by property (25%), retail (19%), and portfolio investments (9%).

SM Retail Inc., which operates grocery stores, department stores, and specialized retail, announced revenues of PHP 415.0 billion, up 10% due to continuous growth in key areas. Net income rose 11% to PHP 19.9 billion. 

As critical expenditures remained consistent, revenues from SM's Food Group (SM Markets, WalterMart, and Alfamart) increased by 7%, accounting for over half of total retail revenue growth. With continued operational efficiency, the food segment's net income climbed by 21%.
The SM Store revenues increased 16% and specialty retail revenues grew 11%, driven by spending on fashion, health and beauty, pets, toys and other discretionary items.

“This sustained growth is reflective of the spending power of Filipinos. Through our diverse range of brands, we cater to the many needs and wants of our consuming public,” Mr. DyBuncio added.

SM had expanded its retail reach to 3,853 stores by the end of 2023. Out of the total 419 new stores established this year, 89% were in provincial areas, reflecting SM's goal to capitalize on growth possibilities in rising cities across the region.

SM Prime Holdings reported a combined net income of PHP40.0 billion in 2023, up 33% from PHP30.1 billion the previous year. Consolidated revenues were PHP 128.1 billion, 21% more than last year's PHP 105.8 billion.

SM's mall division, which accounts for 56% of consolidated property income, increased revenues by 30% to PHP71.9 billion in 2023, up from PHP55.4 billion in 2022. Mall rental income climbed by 24%, reaching PHP 61.3 billion.
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SM's residential division, led by SM Development Corporation (SMDC), saw an 8% growth in revenue to PHP 43.1 billion. Reservation sales were PHP102 billion in 2023, equivalent to more than 21,000 residential units sold.

Other significant businesses, like offices, hotels, and convention centers, saw a 26% growth in income to PHP 13.1 billion.
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BDO Unibank, Inc.'s net income increased from PHP57.1 billion in 2022 to PHP73.4 billion in 2023, driven by growth in its core activities. Net interest revenue increased to PHP186.4 billion, while total customer loans increased by 9% to PHP2.85 trillion, reflecting growth across all market sectors.
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Total deposits climbed 11% to PHP3.57 trillion, with a CASA ratio of 72%. Asset quality improved further, with the non-performing loan (NPL) ratio falling to 1.85% and NPL coverage rising to 185% due to the bank's cautious provisioning stance.

China Banking Corporation's net income in 2023 was PHP 22.0 billion, a 15% increase over 2022, thanks to stronger core business revenues. Net interest revenue climbed by 17% to PHP53.5 billion, as strong growth in loans and investments offset significantly higher interest expenses. Gross loans increased by 10% to PHP791 billion, and consumer loans now account for 23% of the total credit portfolio. On the funding side, total deposits increased by 11% to PHP1.2 trillion, with the CASA ratio at 48%.
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With improved economic conditions, the bank cut loan loss provisions to PHP1.2 billion. Asset quality was constant, with a 2.5% non-performing loan (NPL) ratio, and NPL coverage remained adequate at 104%. 

SM's share of net earnings from its portfolio investment companies increased by 6% in 2023, owing to strong passenger volumes in 2GO's transportation industry, Belle Corp.'s leisure and entertainment sector, and growth in Goldilocks Bakeshop.

“Our portfolio companies continue to present solid potential as we invest in emerging sectors that positively impact the economy,’’ Mr. DyBuncio added.

The overall assets of SM increased by 7% to PHP1.6 trillion. SM's balance sheet is robust, with a prudent gearing ratio of 33% net debt to 67% total equity.
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​SM Investments Corporation is one of the leading Philippine companies that is invested in market-leading businesses in retail, banking, and property. It also invests in ventures that capture high growth opportunities in the emerging Philippine economy. SM’s retail operations are the country’s largest and most diversified, consisting of grocery stores, department stores and specialty retail stores. SM’s property arm, SM Prime Holdings, Inc., is the largest integrated property developer in the Philippines with interests in malls, residences, offices, hotels, and convention centers as well as tourism-related property developments. SM’s interests in banking are in BDO Unibank, Inc., the country’s largest bank, and China Banking Corporation, the fourth largest private domestic bank.