THE holding company SM Investments Corp. reported the attaining double-digit growth in net income for the first half of the year on “extraordinary gains from the sale of marketable securities and global depository receipts.

SMIC said its net income grew by 85 percent to P5.1 billion.

“Excluding extraordinary items, net recurring income expanded by 26 percent for the first half to P2.9 billion on the strength of the retail merchandising business and mall operations. SMIC also gained from improved efficiencies, which kept a tight lid on operating expenses and improved margins,the company said in a statement.

It added that although interest expenses declined by 5 percent to P1.5 billion, provision for the income tax during the period grew by 27.6 percent due to a mandatory increase in corporate income tax rates from 32 percent to 35 percent which took effect in November 2005.

Consolidated revenues posted an 11-percent improvement to P27.8 billion, with merchandise sales contributing 70 percent to total income, growing by 7 percent. 
“Rental income which accounts for 17.5 percent of revenues, grew 17 percent to P4.9 billion. Revenues from cinema operations rose 16 percent to P1.1 billion, while management and other fees and dividends increased 50 percent to P0.4 billion and 31 percent to P0.6 billion,it added.

Operating expenses also grew by 7.5 percent owing to a decline in expenses in light, water and maintenance expenses and marginal increases in rent and outside services.

Among its four major lines of business, the bulk of SMIC’s revenues come from retail operations, contributing 73 percent to total revenues followed by mall operations with 20 percent.

In terms of net income, shopping malls accounted for 40 percent, retail, 28 percent; and real estate, 3 percent. Banking and financial services and other accounted for 5.3 percent of total revenues and 19 percent of net income, SMIC said.