1 0 t h F l o o r, O n e E - C o m C e n t e r, H a r. b o r D r i v e, M a l l o f A s i a C o m p l e x,

Transcription

1 SEC Registration Number S M I N V E S T M E N T S C O R P O R A T I O N A N D S U B S I D I A R I E S (Company s Full Name) 1 0 t h F l o o r, O n e E - C o m C e n t e r, H a r b o r D r i v e, M a l l o f A s i a C o m p l e x, C B P - I A, P a s a y C i t y (Business Address: No. Street City/Town/Province) Ma. Ruby Ll. Cano (Contact Person) (Company Telephone Number) C Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting) (Secondary License Type, If Applicable) Dept. Requiring this Doc. Amended Articles Number/Section Total Amount of Borrowings Total No. of Stockholders Domestic Foreign To be accomplished by SEC Personnel concerned File Number LCU Document ID Cashier S T A M P S Remarks: Please use BLACK ink for scanning purposes.

2 SEC Number PSE Disclosure Security Code SM INVESTMENTS CORPORATION (Company s Full Name) 10 th Floor, One E-Com Center, Harbor Drive, Mall of Asia Complex, CBP-IA, Pasay City 1300 (Company s Address) (Telephone Number) December 31 (Year Ending) (month & day) SEC Form 17-C PRESS RELEASE Form Type Amendment Designation (If applicable) Period Ended Date (Secondary License Type and File Number) 2

3 SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-C CURRENT REPORT UNDER SECTION 17 OF THE SECURITIES REGULATION CODE (SRC) AND SRC RULE 17(a)-1(b)(3) THEREUNDER 1. March 04, 2009 Date of Report 2. SEC Identification Number BIR Tax Identification No SM INVESTMENTS CORPORATION Exact name of registrant as specified in its charter 5. PHILIPPINES 6. (SEC Use Only) Province, country or other jurisdiction of incorporation Industry Classification Code: th Floor, One E-Com Center, Harbor Drive, Mall of Asia Complex, CBP-IA, Pasay City 1300 Address of principal office Postal Code 8. (632) Registrant's telephone number, including area code 9. Former name or former address, if changed since last report 10. Securities registered pursuant to Sections 4 and 8 of the RSA Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding COMMON STOCK, P10 PAR VALUE 611,023, Indicate the item numbers reported herein: ITEM #9. 3

4 Press Release SM 2008 Profits Up 15% to Php14.0 billion (04 March Pasay City, Philippines.) Philippine holding company, SM Investments Corporation (SM) realized a full-year 2008 net income of Php14.0 billion, for an annual growth of 15.6%. Excluding extraordinary items, SM s net recurring income grew by 11% to Php11.6 billion. Operating income stood at Php21.7 billion, resulting in an operating margin of 15%. EBITDA increased by 10% to Php28.1 billion, for an EBITDA margin of 19%. Consolidated revenues increased by 19% to Php147.5 billion boosted by retail sales, which expanded by 17% to Php114.8 billion and the 91% surge in real estate sales worth Php3.8 billion. SM President Mr. Harley T. Sy said, We are pleased to report that amid a very challenging environment in 2008 on account of the global financial crisis, SM managed to perform within expectations, supported largely by the strong performance of our retail and property groups." Mr. Jose T. Sio, SM executive vice president and chief finance officer said, SM continues to pride itself with a strong balance sheet. Its net debt-to-equity ratio as of end 2008 was at a low of 18%, and its cash balance was Php47.7 billion. This reflects the strength of SM s financial position which will allow it not only to weather the current financial turmoil, but to benefit from valuable opportunities arising from the crisis which, in turn, will help the company emerge as a stronger business when the global economy recovers. In 2008, SM also reported extraordinary gains from the sale of San Miguel shares which more than compensated for the mark-to-market losses incurred by the group in its trading positions as a result of the global financial crisis. SM is mainly involved in four core businesses namely, retail merchandising, shopping malls, banking and financial services, and property. 4

5 SM Investments Net Income Profile, January to December 2008 The earnings profile of SM Investments shows the retail and mall businesses as the main contributors accounting for 40% and 36%, respectively. The banks pitched in 16% and real estate 8%. Real Estate, 8% Banking, 16% Retail Merc handising, 40% Shopping Malls, 36% RETAIL MERCHANDISING SM s retail group delivered a strong performance with its 2008 net income increasing by 24% to Php3.4 billion. The food group, which consists of SM Supermarkets, SaveMore stores, SM Hypermarkets, and Makro, turned in a consistent performance throughout the year despite high inflation during the first half of the year. It also penetrated new markets through its new stores. The non-food group, mainly SM Department Stores, rallied in the second half as consumer confidence got a strong lift from the sudden decline in gasoline prices, easing inflation, and a weaker Peso. Many of SM s customers are families of Overseas Filipino Workers. EBITDA for the retail group reached Php6.4 billion, with EBITDA margin at 5.5%. For the year, the retail group opened a total of 11 stores, of which two are department stores, two are supermarkets, two are hypermarkets, and five are SaveMore stores. SM s retail group now has a total of 97 stores composed of 33 department stores; 37 supermarkets, 13 of which are SaveMore branches; 13 hypermarkets; and 14 Makro outlets. SaveMore outlets are stand-alone supermarkets located outside SM malls, except for one located at The Annex of SM North EDSA. The Makro stores were consolidated in late 2007 after SM increased its ownership of Pilipinas Makro, Inc. to 60%. For 2009, the SM retail group plans to open two new SM Supermarkets, 14 SaveMore branches, four SM Hypermarkets, and two SM Department Stores. 5

6 MALL OPERATIONS SM s mall operations subsidiary, SM Prime Holdings, Inc. reported a 7% growth in its 2008 net income of Php6.4 billion, as gross revenues of Php17.8 billion increased by 12% over that of the previous year. EBITDA stood at Php12.3 billion for an increase of 9%. Rental revenues contributed the largest share for the year, increasing by 15% to Php15.4 billion. Cinema ticket sales were flat due to a dearth of movie blockbusters. Income from operations rose to Php9.6 billion, up 9% over the previous year. Operating expenses, on the other hand, increased 15% to Php8.2 billion. SM Prime inaugurated three new malls in 2008, namely SM City Marikina, SM City Rosales, and SM City Baliwag, and expanded two, which are SM Megamall and SM City North Edsa. Combined, the new malls and expansions added 9% or 353,000 square meters (sqm) of gross floor area (GFA), bringing the total 2008 GFA to 4.3 million sqm. For 2009, SM Prime plans to open SM City Naga in Camarines Sur, SM City Rosario in Cavite, SM City Pamplona in Las Piñas, and the Sky Garden at SM City North Edsa. The company is also set to expand SM City Rosales in Pangasinan. By the end of the year, SM Prime will have 36 malls nationwide and three malls in China, with an estimated GFA of 4.9 million sqm. BANKING AND FINANCIAL SERVICES Banco De Oro (BDO) In 2008, BDO Unibank, Inc. emerged as the country s largest bank as its total resources grew 30% to Php802.0 billion. This was supported by very strong growth in deposits, up 43% to Php636.8 billion, and gross customer loans, up 32% to Php392.8 billion. Net interest income, therefore, increased 7% to Php23 billion for the same period. However, due to the impact of the global financial crisis on its trading position, net income amounted to Php2.2 billion. BDO s core business is now reaping the benefits from its merger with Equitable- PCIBank as its customers find more confidence from its current size and dominant position. BDO's NPL ratio for the period was 4.0% and return on equity was 3.8%. Its capital stood at Php57.8 billion for a capital adequacy ratio of 14%. 6

7 REAL ESTATE AND PROPERTY DEVELOPMENT SM s real estate operations turned in a stellar performance as its revenues surged by 66% to Php6.8 billion in Net income from real estate jumped 89% to Php1.5 billion. Much of the growth came from the sale of residential condominium units by listed subsidiary SM Development Corporation. Further contributions were provided by the leasing activities of the commercial properties group; the sale of condominium units and club shares in Pico de Loro; and the resort project of Costa del Hamilo. Pico de Loro is one among 13 coves in Hamilo Coast, which is SM s springboard for tourism development. The first two condominium clusters in Pico de Loro Cove, namely the Jacana and the Myna are both 89% sold as of end January This led to the launch of two more clusters last November 2008: the Carola and Miranda, each selling 248 units. Meanwhile, the Pico de Loro beach club was formally opened last February SM s two major projects at the Mall of Asia Complex in Pasay City, which are the SMX Convention Center and the OneE-Com Center, continue to enjoy strong market support. As the country s largest exhibit, trade show, convention, and banquet venue, SMX accommodated more than 750,000 delegates to various events in The fully leased OneE-Com, on the other hand, is a ten-storey building specifically designed for the use of contact center, customer relationship management, business process outsourcing (BPO), and other specialized companies. SM Hotels Corporation saw the completion of the expansion of the Taal Vista Hotel in Tagaytay City from just 130 rooms to 260 with an additional ballroom that can seat up to 1,000 guests. The new wing is now enjoying high occupancy and is hosting a number of large-scale events at the new ballroom. It is scheduled to open Radisson Hotel Cebu, which is a 500-room five star hotel situated beside SM City Cebu. Meanwhile, in the pipeline at the Mall of Asia Complex are the Radisson and Regent Hotel, and a world-class entertainment facility, to be operated by a foreign company. SM Development Corporation (SMDC) SMDC reported a 116% surge in its net income from real estate operations, from Php513 million in 2007 to Php1.1 billion in SMDC s gross profit on real estate sales during the year reached Php1.7 billion; double that of the previous year. Realized revenues from real estate operations surged 56% to Php3.1 billion, brought about by the strong sales uptake of the Grass and Berkeley Residences, coupled with the higher completion rates of Mezza Residences and the completion of cluster six of Chateau Elysee. For the whole of 2008, SMDC sold a total of 2,622 residential units worth Php5.1 billion. Compared to the same period in 2007, the number of units sold increased by 28%. Consolidated net income stood at Php56.0 million, as compared to Php1.3 billion in The decrease was mainly due to unrealized mark-to-market losses from equity 7

8 investments that are held in SMDC s portfolio from its previous business as an asset management company. SMDC has five on-going projects. Chateau Elysee, a six-cluster mid-rise condominium project in Parañaque City, is now in its fifth cluster, which is 5% completed. Mezza Residences across SM City Sta. Mesa is 95% complete with two of its towers due for turnover to homebuyers this March. Berkeley in Katipunan Road across Miriam College is 22% complete, and Grass Residences beside SM North EDSA is 24% complete with its phase one. Lindenwood Residences, which is a residential subdivision in Muntinlupa City, is 99% complete. In 2008, SMDC broke ground for two more condominium projects, the Sea Residences near the Mall of Asia Complex in Pasay City and Field Residences in Sucat, Parañaque City. Both these projects are seeing very strong demand from the market. For further information, please contact: Ms. Corazon P. Guidote Vice President for Investor Relations SM Investments Corporation cppg@sminvestments.com Tel End- SIGNATURE Pursuant to the requirements of the Securities Regulation Code, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SM INVESTMENTS CORPORATION Registrant Date: 04-March-09 Jose T. Sio Executive Vice President and Chief Financial Officer 8