SBS Philippines Corp. (SBS) has included real estate in its line of business, changing the company’s secondary purpose in its articles of incorporation.
The company said its board of directors has approved to amend the secondary purpose of its articles of incorporation to diversify business “to include the holding, acquiring or participating in investments in property related assets as well as shares or interests in entities involved in property related businesses as and when the appropriate opportunities arise.”
“The diversification proposal will be submitted for shareholder approval in the forthcoming annual general meeting of the company,” the company said in a statement.
SBS said its chemical trading business has been highly successful that, over time, it was able to invest its surplus funds to take advantage of opportunities in the real estate market and experience a significant improvement in values of its real estate investments.
“In 2016, the company unlocked the value of certain long term investments in property related holdings which were held for capital growth and completed with a significant one-off gain from the disposal of such investments assets in the amount of P858.8 million,” it said.
Initially using the fund from ts earnings from the sale of its investment properties, SBS intends to further take advantage of the opportunities in the real estate market and continue with such investment strategy as a separate business to be undertaken by its wholly owned subsidiary, SBS Holdings and Enterprises Corp.
“This move is intended to provide balance to counteract some of the fluctuations in the chemical trading business and at the same time grow and diversify the company’s income streams,” said Gerry D. Tan, SBS president.
SBS earlier said it close 2016 with profits of P1 billion, 535 percent higher than the prior year’s P159 million.
The company said it realized significant gains “from the divestment of interests in an associate and certain investments assets.”