SM Prime nets P1.24B in Q1

Boosted by the steady growth of lease revenues, mall giant SM Prime Holdings Inc. posted a seven-percent growth in its first quarter net income this year to P1.24 billion from P1.16 billion in the same period last year.

Gross revenues likewise went up seven percent to P2.49 billion from P2.33 billion a year earlier. Bulk of this amount came from rental revenues, accounting for P2.05 billion or an increase of 11 percent from the previous year’s P1.84 billion.

In a financial report filed with securities regulators, SM Prime attributed the increase to rentals from two new malls that opened in 2004, namely SM City Dasmariñas and SM City Batangas which both have a current average occupancy level of 90 percent.

But as a result of the opening of new malls, SM Prime’s operating expenses increased by 10 percent.

SM Prime earlier declared P2.3 billion in cash dividends, equivalent to half of its prior year’s net profit. This translates to a dividend rate of P0.233 per share. Shareholders on record as of May 25 are entitled to the dividend payable on June 20.

The cash dividend was in line with management’s improved dividend policy. With its aggressive expansion plans in the pipeline, SM Prime is looking forward to consistent growth in revenues and profits this year. The company reported an 11-percent increase in net income last year to P4.62 billion.

The company plans to open eight shopping malls this year and in 2006, including its biggest mall to date, the SM Mall of Asia, with a total floor area of 448,000 square meters, in the Manila Bay area.

Mall of Asia, to be opened in December, is set to be the centerpiece of a 60-hectare central business park that the SM group plans to develop in the Manila Bay area.

This year, SM Prime plans to spend P5.5 billion to P6 billion to fund the construction of new malls and further beef up its landholdings from the current 187 hectares all over the country.

Aside from SM Mall of Asia, other malls expected to open this year includes SM City Molino (Cavite), SM City San Lazaro (Manila), and SM Valenzuela.

Total gross floor area will increase to 3.2 million square meters by end-2005 from 2.5 million square meters as of December 2004.