SMIC's 2018 Profit Is 13% Higher - Marvin Germo

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SMIC’s 2018 Profit Is 13% Higher

By: Marvin Germo | March 1, 2019

SMIC’s Increase in Profit and Revenue

It’s the beginning of the third month of 2019 already, and the SM Investment Corporation (SMIC) is continuously making its way to success. By end of 2018, the company has generated earning 13% higher than 2017. The statement of the company released on February 28, 2019 said that a P37.1 billion net income was raised in 2018, which is considerably higher than the P32.9 billion it has on 2017. Relatively, its revenue rose to P449.8 billion, 13% more than the previous year. It seems like the lucky number for the company is 13. Let’s take a look on what causes the increase on the firm’s figures.

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Behind The Profit Hike

The firm has various business activities which cause the high increase of their revenues and income. The company believed that the 2018 increase is because of the steady growth in property, retail, and banking units. According to the SM’s President Frederic C. DyBuncio, these three core businesses had showed them strong growth when it comes to revenue and earnings. It was an “impressive” performance, as what Philstocks Financial, Inc. Research Associate Japhet Louis Tantiangco commented, which is far beyond its 5.94% compounded annual growth rate.

Property, Retail, and Banking Units’ Performances 

The property unit of the company has contributed 41% on the group’s earning last 2018 while the bank units provided 38%, then retail units by 21%. The SMIC’s property investments, lead by its holding firm SM Prime Holdings, have its net income climbed to P32.2 billion, 17% higher. This is mainly because of the new mall expansions that gave them P59.3 billion revenue and P50.5 billion rental income. Meanwhile, BDO Unibank, Inc. and China Banking Corporation have reported 17% and 7% increase, which is P32.7 billion and P8.1 billion respectively as their net income. This is all driven by its lending and deposit products.

SMIC’s Outlook for 2019

Since the firm ended a good 2018, Mr. Tantiangco believes that 2019 is another prosperous year for SMIC. 2019 is going to give the company big hits on revenues and income, with the property units as its main contributor. Strong contributions will also come from its retail units since the prices of commodities are already on its stable state.

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