(Source: Business World | October 4, 2015)
SM Investments Corp. may set aside as much as P100 billion to support its expansion program next year, as the holding firm of the country’s richest man Henry Sy, Sr. plants the seeds that will allow the conglomerate to take advantage of the Philippine economy’s robust growth.
SM Chief Financial Officer Jose T. Sio told reporters on Friday the company may spend “between P80 billion [and] P100 billion” next year. The holding firm pegged its capex at P85 billion this year.
The planned capital expenditure (capex) does not include funds for acquisition or budget for infrastructure projects if the SM group wins some of those under the government’s public-private partnership program, he said.
“The value of the Philippines is not today. The value of the Philippines is in the future. We are a developing nation so if you don’t act now, you will be left behind,” Mr. Sio said.
SM has core businesses in retail, banking and real estate, making it a proxy of the Philippine economy, one of the fastest growing in the region.
The Philippine economy grew 5.3% in the first half — outside of the government’s target of 7-8% and slower than the 6.2% in the same period a year ago.
SM is excited at the prospect of an integrated Southeast Asia wherein the 10-nation bloc will become a single market of around 600 million people.
The conglomerate is open to partnerships that can boost its business here or allow the company to set up shop in the region, Mr. Sio said.
“Retail is an industry that you cannot transplant from one place to another place… In retail, you have to know the government, the people, suppliers, competitors. If we have to go out, we need to have a strong partner,” he said.
SM’s consolidated net profit went up by a tenth to P13.5 billion in the January to June period. Excluding extraordinary items, net income would have improved by 13% during the same period.
Consolidated revenues climbed 6% year-on-year to P138.9 billion in the first semester from P130.9 billion.
Shares in SM shed P18 or 2.03% to close at P870.50 apiece on Friday. — Krista Angela M. Montealegre
Article Link: http://www.bworldonline.com/content.php?section=Corporate&title=sm-investments-capex-may-hit-p100b-in-2016&id=116350