By Neil Jerome C. Morales (The Philippine Star) | Updated July 13, 2013 - 12:00am
MANILA, Philippines - Two blue chip companies have indicated strong performance in the first half of the year on the back of the continued growth in consumer spending, top executives said.
SM Investments Corp. (SMIC), the holding firm for the various businesses of the Philippines’ richest man Henry Sy, likely grew its profits by double digits in the first half while property giant Ayala Land Inc. (ALI) gained the same momentum it recorded in the first quarter.
SMIC chief finance officer Jose T. Sio told reporters that the conglomerate’s bottom line likely jumped “14 to 15 percent for the first half.”
“Normally, second quarter is slower but we were able to maintain that growth in the first quarter because of the elections,” Sio said.
The preliminary data keeps SMIC on track with its growth projections. In its 2013-2015 plan, SMIC targets to boost its profits 12-15 percent annually that will be supported the company’s continuous expansion.
In the first quarter, SMCI’s net income climbed 22 percent to P7.4 billion while revenues rose 15 percent to P56.8 billion from P49.6 billion a year ago.
The uptick in earnings was driven by the surge in income of SMIC’s banking business, coupled with strong profit growth from the mall and property businesses.
For ALI chief finance officer Jaime Ysmael, the property firm of the Ayala conglomerate recorded higher profits in the second quarter.
“The numbers continue to be good and consistent with what we’ve seen in the first quarter,” Ysmael said.
“Our numbers continue to be strong in the residential, malls and office,” he said.
In the first quarter, ALI’s net income climbed 30 percent to P2.76 billion from P2.13 billion a year ago on the back of better performance across all business segments.
Consolidated revenues hit P18.53 billion, up 38 percent from the P13.39 billion in the same period last year.
The two corporate giants are optimistic for the second half of the year.
Sio said: “We expect that [growth trajectory] will be maintained in the final six months of the year.”
He said consumer spending remains strong especially given the weakness of the peso.
A weaker peso increases the value of dollar export earnings and remittances from overseas Filipinos. This jacks up the spending power of families that receive dollars.
“A weaker peso, but not so weak, is also good for the whole economy. It is good for overseas Filipino workers, exports and our financing also,” Sio said.