SM Prime posts 7% income growth in first quarter

MANILA, Philippines - SM Prime Holdings Inc., the country’s largest shopping mall developer and operator, reported a seven-percent rise in its consolidated net earnings in the first three months this year, driven by steady growth in leasing operations.

In a statement issued yesterday, SM Prime said its net profit amounted to P1.7 billion compared with P1.6 billion in the same period a year ago. Consolidated revenues likewise expanded 18 percent to P4.7 billion while EBITDA (earnings before interest, taxes, depreciation and amortization) improved 14 percent to P3.3 billion for an EBITDA margin of 69 percent.

The company’s first quarter results include the operations of the three SM malls in China which were acquired early last year.

These malls are located in the cities of Xiamen and Jinjiang in Southern China, and Chengdu in Central China.

 “We are very pleased by the resilience that our malls are experiencing despite earlier prognosis of a more challenging economic environment. The SM malls continue to enjoy high foot traffic and healthy sales growth. As we continue to focus on offering quality and value for money products and services, we also closely monitor the effects of the global financial crisis on local demand, especially on consumer spending. We are hopeful that moving forward it will have much less of an impact in Asia,” SM Prime president Hans T. Sy said

Rental fees cornered the biggest chunk of revenues, hitting P4.1 billion or an increase of 19 percent from the year earlier level due to the opening of new malls as well as the expansion of The Annex at SM North Edsa and the Atrium at SM Megamall.

Among the new malls that opened last year were SM City Marikina, SM City Rosales and SM City Baliwag.

Combined, these new malls and expansions added approximately 353,000 square meters (sqm) to SM Prime’s total gross floor area (GFA).

Meanwhile, cinema ticket sales during the quarter under review rose eight percent.

Income from operations amounted to P2.5 billion, up 14 percent from P2.2 billion last year.

Operating expenses, on the other hand, jumped 23 percent to P2.2 billion, primarily due to the opening of new and expanded malls. 

Last Friday, the company opened SM Naga in Camarines Sur, its first mall in the Bicol region and its first to be opened this year.

Other malls slated for opening this year are SM City Rosario in Cavite and SM City Pamplona in Las Piñas.

SM Prime will also unveil the Sky Garden, which is an innovative expansion of SM City North EDSA, and complete the expansion of SM City Rosales in Pangasinan.

SM Prime expects to end the year with a total of 36 malls in the country, with an estimated gross floor area of 4.9 million sqm.