Commodities● Neutral
SM Investments posts 8% profit growth on strong Philippine consumer spending
SM Investments' 8% rise in H1 net profit to PHP45.9B shows resilient Filipino consumer spending across retail and banking. Management sees continued growth in H2 despite macro risks.
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SM Investments' first-half net profit rose 8% from a year earlier to PHP45.9 billion, a signal that consumer demand in the Philippines held its ground even as inflation and interest rates climbed. The country's largest conglomerate by assets generated the bulk of its earnings from banking and retail operations.
"Consumer spending in our retail stores and malls remained healthy despite recent economic shocks," said Frederic C. DyBuncio, president and chief executive officer. "The Filipino consumer was tested during the first half of the year but our businesses proved to be resilient."
Banking contributed 47% of group net income, property 27%, retail 15% and portfolio investments 11%. Banks posted mid-teens loan growth, reflecting what DyBuncio called the continued strength of the core banking franchise. SM's banking interests include BDO Unibank, the country's largest bank, and China Banking Corporation.
SM Retail, the unlisted consumer-facing arm, grew net income 5% to PHP8.9 billion, while operating income advanced 12% to PHP14 billion – a sign that cost controls were working even as inflation cut into margins. Food retail posted steady sales across its supermarket and minimart formats. Specialty retail gained on demand for power source alternatives through the Home category, along with growth at Kultura and Crocs in fashion and across toys, pets and stationery.