SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading integrated property company registered a 15% net income growth to PHP7.79 billion in the second quarter of 2017 from PHP6.75 billion in same period last year.
This brought SM Prime’s first half’s net income to PHP14.39 billion from PHP12.59 billion of last year, an increase of 14%. Consolidated revenues grew by 10% to PHP43.25 billion from PHP39.23 billion in same period last year. Meanwhile, overall operating income went up by 13% year-on year to PHP20.11 billion from PHP17.85 billion.
“ SM Prime’s performance in the first half of the year reflects a more balanced revenue and income streams from our various businesses including the growing contribution from our provincial operations.”
“ We are happy to report that our investments in the provinces are now bearing fruits, particularly in mall operations given that these account for more than half of our Philippine malls portfolio. In the coming years, we are expecting a growing contribution from our residential group as we are launching more housing projects across the country,” SM Prime President Jeffrey C. Lim said.
Mall revenues, which contributed 60% of SM Prime’s consolidated revenues, rose by 10% in the first half of the year to PHP25.68 billion from PHP23.42 billion last year. Mall rentals improved by 10% to PHP21.75 billion from PHP19.79 billion, driven by additional 1.1 million square meters (sqm) gross floor area (GFA) of retail spaces from new malls and expansions in 2015 to 2017, as well as 7% same-mall-sales growth. Cinema and event ticket sales was almost flat at PHP2.35 billion due to fewer blockbuster movies. Revenues from amusement and merchandise sales amounted to PHP1.58 billion, up by 26%. Consolidated mall operating income increased by 10% to PHP14.18 billion from PHP12.90 billion, while operating margins were stable at 55% in the period under review.
To date, SM Prime has 63 shopping malls in the Philippines and seven in China with a GFA of 7.8 million sqm and 1.3 million sqm, respectively. The company is scheduled to open new malls, including SM City Puerto Princesa in Palawan.
Residential group, which accounts for 32% of SM Prime’s consolidated revenues, recorded a 5% increase in revenues to PHP13.91 billion from PHP13.25 billion. Revenue growth came from higher construction accomplishments of SM Development Corporation (SMDC) projects launched since 2014. These are Shore 2 Residences in Pasay City, Air Residences in Makati City, Cool Residences in Tagaytay City, Fame Residences in Mandaluyong City, Trees Residences in Quezon City and South Residences in Las Piñas City.
Recently launched projects continue to enjoy brisk sales, resulting in 22% reservation sales growth to PHP27.55 billion from PHP22.60 billion or 8% increase in unit sales to 8,699 units from 8,078 units. These residential projects are mostly located in the Mall of Asia Complex.
The rest of SM Prime’s businesses posted a revenue growth of 43% to PHP3.74 billion in the first half of the year from PHP2.61 billion last year. Operating income increased by 49% to PHP1.77 billion from PHP1.19 billion while operating income margin improved by 47% from 45% in the same period. The growth was attributed to the rental revenues from FiveEcomCenter, launched in 2015, and Conrad Manila which opened last June 2016.
Currently, SM Prime has six office buildings with a combined GFA of 383,000 sqm. ThreeECom and FourE-Com Centers are under construction and scheduled for completion in 2018 and 2020, respectively. These additional office buildings will add an estimated GFA of 320,000 sqm in the company’s office portfolio. While Hotel and Convention Centers group has a portfolio of six hotels with over 1,500 rooms, four convention centers and three trade halls.
SM Prime remains committed to its role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life of millions of people.