SMIC sees double-digit earnings from portfolio investments

Philippine Tribune
Philippine Tribune

The Sy siblings’ flagship SM Investments Corporation (SMIC) is expecting that its portfolio investments will account for more than 10 percent of overall earnings in the medium term.

The firm’s investments are in integrated resorts through Belle Corporation, in copper mining through Atlas Consolidated Mining and Development Corporation, in community mall chain CityMall, and office towers under the NEO Subsidiaries and NEO Associates.

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SMIC Consultant for Investor Relations and Sustainability Timothy Daniels 

It also includes leading end-to-end logistics firm 2GO Group, the country’s leading bakeshop Goldilocks, Philippines Urban Living Solutions, Inc., the largest co-living provider in the country which manages and operates MyTown, and in GrabPay with its focus on electronic wallet and payment development in the Philippines.

To add incremental growth to the already aggressive performance of its core businesses, SMIC built its portfolio investments before the pandemic. It already contributed 10 percent to total net earnings as of the first half.

In a recent forum, SMIC Consultant for Investor Relations and Sustainability Timothy Daniels noted how the Group’s portfolio business is now delivering double-digit contribution collectively and the goal is to continue building on its growth momentum. 

“We think we can get this to the mid-teens in percentage contribution over the medium term. Particularly, our optimism lies in the potential contributions of logistics and geothermal ventures to drive faster growth,” he said in his talk at the recently concluded Philippine Stock Exchange Investor Day. 

Daniels noted that, “the investments we made in Philippine Geothermal Production Company and in logistics with 2GO and Airspeed, have performed well.”

In 2022, 2GO delivered a milestone turnaround in profits of P312 million on the back of P19.3 billion in revenues. 2GO’s revenues grew 25 percent as the company benefitted from the country’s economic reopening and complete lifting of movement restrictions.

Increasing geothermal energy production through PGPC fits with SM’s objectives when it comes to its sustainability agenda. With PGPC, the SM Group will be able to provide steam to power plants that will, in turn, go to the communities that need them. 

“We are picking the businesses that add to the ecosystem of SM Investments. It’s about creating value and growth,” Daniels said. 

 

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