SM Investments Corporation (SMIC) said Friday its board approved a share buyback program worth up to P60 billion (about $1 billion) as the conglomerate booked a record profit in 2024.
This marks the first buyback program in the company’s history.
The decision comes as SMIC’s share price fell below its historical valuation multiples.
SMIC’s stock closed at P780 on Feb. 27, 2025, translating into a price-earnings ratio of 11.5x based on 2024 earnings.
“This major undertaking is in recognition of the significant under-valuation of SM Investments’ share price. In the current market, we trade well below our historical valuation multiples, which do not reflect the performance and future growth potential of the group,” SMIC president and chief executive Frederic DyBuncio said.
The buyback program aims to increase shareholder value by reducing the number of shares outstanding, which should improve future earnings per share.
SMIC said it plans to buy back up to 6 percent of total outstanding shares.
Meanwhile, SMIC also reported an all-time high net income of P82.6 billion in 2024, up 7 percent from P77 billion in 2023.
Consolidated revenues grew 6 percent to P 654.8 billion from P616.3 billion in the previous year.
“We ended 2024 with a strong performance, despite the high base of 2023 and inflationary headwinds during the year. Our core businesses all grew, supported by positive macroeconomic fundamentals and healthy consumer sentiment,” Dybuncio said.
The group’s banking division contributed the largest share to net income, at 49 percent. Property followed with 26 percent, retail at 18 percent and portfolio investments at 7 percent.
SM Retail reported a net income of P 20.9 billion in 2024, up from P 19.9 billion in 2023. Revenues grew 5 percent to P434.5 billion, driven by a strong performance in food retail, which saw an 8-percent increase in revenues.
Specialty stores grew by 3 percent, while department store operations remained resilient.
SMIC’s property unit SM Prime Holdings Inc. posted a 14-percent increase in net income to P45.6 billion in 2024, driven by higher contributions from all business segments. Revenues for SM Prime increased 10 percent to P140.4 billion.
BDO Unibank reported a 12-percent increase in net income to P82.0 billion, supported by solid performance across its core businesses. China Banking Corp. also saw a 13-percent increase in net income to P24.8 billion, driven by growth in net interest income and loan demand.
