SMDC profit surges 48% to P2 billion

MANILA, Philippines - SM Development Corp. (SMDC), the residential development arm of tycoon Henry Sy’s SM Investments Corp., said its net income rose 48 percent in the first nine months of the year on robust sales.

In a statement, SMDC said its net earnings grew from P1.4 billion to P2 billion while revenues from real estate operations jumped 63 percent to P6.1 billion during the period under review.

Income from real estate operations likewise went up 43 percent to P1.6 billion while earnings before interests, taxes, depreciation and amortization (EBITDA) amounted to P2.4 billion, for an EBITDA margin of 40 percent.

From January to September this year, SMDC pre-sold 8,040 residential units worth approximately P16.9 billion, up 122 percent from the same period a year earlier.

These positive results boosted SMDC’s performance at the stock exchange with its market capitalization surging 172 percent to P56.1 billion. At the end of September 2010, SMDC shares closed at P10.20 a piece or 158 percent higher than its end-2009 level.

“We are highly encouraged by the sustained warm market acceptance of SMDC’s projects. Our residential condominiums are enjoying brisk sales while construction are ongoing. We are exerting stronger efforts to allow this trend to continue and prosper thus we are also looking to expand in areas outside Metro Manila and even outside the Philippines such as in China,” said SMDC vice chairman and chief executive Henry Sy Jr.

As of end-September 2010, SMDC has 13 residential projects in the market. This year, the company launched its new brand, MyPlace, which caters to the middle-class segment of the market. 

This pioneering concept aims to tap a younger market, composed mostly of upwardly mobile young adults who want to experience independent living.

Among its projects in the pipeline is Wind Residences, a nine-tower, 20-story condominium building in Tagaytay City with an estimated development cost of P12 billion. The project will offer a total of 7,758 units when completed in 2015. 

SMDC is undertaking a rights offering involving 1.83 billion shares to raise around P11.7 billion. Shareholders can buy one share for every three common shares held as of Oct. 6 at P6.38 a piece, above the earlier price range of P5.45 to set by the company P5.73 per share.

The offering period will run from October 18 to 22 while the listing of the shares is scheduled on Nov. 3.