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Richmond Mercurio - The Philippine Star
March 3, 2025 | 12:00am
Stock photo of a peso money bill.
Philstar.com / Jovannie Lambayan
MANILA, Philippines — SM Investments Corp. (SMIC), the investment holding company of the Sy family, is pouring in as much as P7 billion this year to continue the aggressive growth of its retail business in the country.
“For our retail group, we’re going to spend between P5 billion and P7 billion for the expansion of the stores,” SMIC executive vice president for finance Franklin Gomez said.
Gomez said that the amount forms part of SMIC’s planned capital expenditures for 2025, the biggest portion of which will be used by integrated property developer SM Prime Holdings Inc. amounting to P100 billion.
“SM Prime will be the biggest spender of capex. But outside the property group, we also include some M&As (mergers and acquisitions) if there are some opportunities at the parent, but that we cannot estimate,” he said.
SM’s retail operations are the country’s largest and most diversified, consisting of grocery stores, department stores and specialty retail stores.
Last year, SM Retail delivered a net income?of P20.9 billion, up from P19.9 billion in 2023, as revenues grew by five percent year-on-year to?P434.5 billion.
The food retail segment was the strongest performer with an eight percent revenue growth, driven by expanded store networks and improved customer engagement.
Specialty stores also recorded a solid performance with a three percent revenue increase, while department store operations remained resilient. SM added 619 retail stores last year.
SMIC investor relations head Timothy Daniels, meanwhile, said that the group’s portfolio investments are all in growth mode.
“In fact, we want the portfolio to increase its percentage contribution to our earnings overtime. Even as retail, banking and property grow, we want these ones to collectively grow faster,” he said.
Portfolio investments contributed seven percent to SMIC’s net income of P82.6 billion in 2024.
Continuing to perform positively were the Philippine Geothermal Production Co. which contributed to 46 percent of total portfolio net income, NEO at 22 percent and Belle Corp. at 10 percent.
“Logistics is something which is very crucial to the growth of the Philippine economy and we will continue to push that and as well as basically support the domestic tourism by sea, which is something new that we want to promote in the Philippines,” SMIC president and CEO Frederic DyBuncio said.
“In addition to logistics, obviously renewable energy is another area which we want to continue to grow and really support the government’s efforts in basically increasing the renewable energy sector in the Philippines moving forward,” he said.
Last week, SMIC announced that it is embarking on a share buyback program of up to P60 billion, the first buyback program in the company’s history, in hopes of enhancing its share price which the company currently sees as undervalued.
SMIC shares closed at P780 per share on Feb. 27, 2025, translating to a price-earnings ratio of 11.5 times based on 2024 earnings.
The buyback program intends to create value for its shareholders by reducing the number of shares outstanding, thereby improving future earnings per share.
