SM Investments Corp., the holding firm of the Sy family, may raise about a third of its planned capital expenditures this year from either debt or through bond float.
Jose Sio, the company’s EVP and chief finance officer, said the company usually raises between a third to 40 percent of its capital expenditures from outside sources such as debt.
“As soon as there is the right time—there is liquidity, low interest rate—we’ll go ahead with the fund-raising. We go out because there is an opportunity for us,” Sio said.
This year the company said it will allocate some P80 billion to P85 billion in capital expenditures.
Sio said the debt could either be local or international, though the company has a preference to tap from domestic sources.
“We can raise anytime. It could be tomorrow if I can get a good rate,” Sio said.
SM reported a slightly higher attributable net income to P28.4 billion last year from the previous year’s P27.4 billion as lower-trading gains pulled down the company’s profits.
Excluding extraordinary items such as trading gains from the banks, SM’s recurring net income grew 14 percent, the company said.
SM’s underlying earnings growth was mainly driven by BDO Unibank Inc., the country’s largest lender, which posted a core-income growth of 18 percent.
Together with China Banking Corp., banks accounted for 41 percent of SM’s consolidated net income in 2014. Property, meanwhile, contributed 38 percent and retail, 21 percent.
“The group’s strong underlying earnings growth was the result of solid performance and ongoing expansion in all our three core businesses. During the year we raised additional capital and entered into several strong partnerships, accelerating our investments for growth and ensuring we expand in line with our continuing optimism about the economic prospects of the Philippines,” SM said.
Consolidated revenues grew 9 percent to P275.7 billion in 2014 from P253.3 billion in 2013, mainly as a result of a good retail sales environment which also boosted rental revenues in SM’s property business.
Last year SM raised P15 billion in May 2014 from a public offer of peso-denominated retail bonds with maturities of seven and 10 years.
In June 2014, SM issued a $350-million 10-year senior unsecured bond at a fixed rate of 4.875 percent per annum, a landmark transaction marking the longest-dated dollar bond issued by SM and the company’s fourth US dollar denominated bond issuance since 2009.