SM Investments Corporation (SMIC), the flagship of the Sy family, is expected to continue with the expansion of its core businesses by expanding its business footprint.
In a statement, Philippine Rating Services Corporation (PhilRatings) also expects SMIC to maintain a healthy balance sheet and keep efficient operations.
“These strategic actions will be complemented by investments in new sectors which offer high-growth potential and also, are strongly supportive of the Group’s core businesses,” the rating agency added.
Because of these and other factors, PhilRatings has decided to maintain its highest PRS Aaa rating for SMIC’s outstanding bond issues amounting to P47.3 billion. The ratings have a Stable outlook.
Obligations rated PRS Aaa are of the highest quality with minimal credit risk. This means the obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
A Stable outlook, on the other hand, indicates that the rating is likely to be maintained or to remain unchanged in the next 12 months.
PhilRatings said the ratings reflect SMIC’s solid financial profile, backed by ample liquidity and a sound capital structure while its core businesses have leading market positions, sustained earnings and recurring cash flows.
It also cited SMIC’s progressive growth strategy which is focused on further strengthening core businesses, organically and through investments in companies that share strong synergies with the SM Group and the country’s continued robust economic growth, which is seen to benefit the SM Group.
SMIC’s liquidity has been robust and is expected to remain as such, supported by recurring revenue streams from the SM Group’s growing malls, office and hotel portfolios.
Internally-generated cash will remain positive, and also the main funding source for the forecast period 2018-2019.