SM Group net income down 48% in 2020

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Metro Manila (CNN Philippines, February 26) — SM Investments Corp. (SMIC), the owner of the Philippines' largest mall operator, saw its profit shrink by almost half in 2020 as the coronavirus pandemic changed consumers' appetite.

In a disclosure on Friday, SMIC said its bottomline last year plunged by 48% to ₱23.4 billion from 2019's ₱44.6 billion.

Consolidated revenues in 2020 also fell to ₱392.2 billion against the previous ₱502 billion.

"Our businesses continued to build momentum through the end of 2020 as they addressed the changed behaviors and needs of our customers," SMIC President Frederic C. DyBuncio was quoted as saying in the filing to the local bourse.

"Our banks, food retailing, and residential property all performed well, while our malls and non-food retail operations showed steady improvements as conditions allowed," he added.

The Sy-led conglomerate's banking segment, run by BDO Unibank, Inc. and China Banking Corp., contributed half of the group's net income for the period. The property business, meanwhile, made up 33% of the earnings. The retail segment only accounted for 12%.

It said BDO's profit last year went down to ₱28.2 billion from ₱44.2 billion a year earlier due to "pre-emptive provisions of ₱30.2 billion set aside against potential delinquencies from the pandemic."

But this was offset by China Bank's 20% earnings growth amounting ₱12.1 billion.

The group's property business SM Prime Holdings bore the brunt of the COVID-19 pandemic as net income dropped to ₱18 billion against 2019's ₱38.1 billion. Its topline also suffered, falling to ₱81.9 billion from ₱118.3 billion in 2019.

SM Prime's mall business generated lower revenues, reaching ₱23.6 billion from ₱57.8 billion. Rent income also decreased to ₱21.8 billion from ₱48.4 billion.

SM Development Corp., SM Prime's residential unit, saw its revenues jump by 6% to ₱46.5 billion, while reservation sales also climbed by 10% to ₱99 billion.

Net income of SM Retail Inc., which consists of the group's non-food and food stores, sank by 67% to ₱4.1 billion. Its revenues stood at ₱296.8 billion, or 19% lower than ₱366.8 billion.

Shares in SMIC fell 2.79% or ₱29 to finish at ₱1,009 apiece on Friday.