SM Prime 2012 earnings up 16% to breach P10 B

MANILA, Philippines - SM Prime Holdings Inc., the mall operator and developer of the SM Group, has breached the P10-billion mark in its annual net income.

The country’s largest mall operator posted a 16 percent earnings growth to P10.53 billion last year from P9.1 billion in 2011.

“SM Prime’s better-than-expected performance was largely due to rentals from new SM Supermalls launched in 2011 and 2012 coupled with a robust same-store rental growth of eight percent,” the company told the local bourse.

It is the second straight year the mall developer exceeded its profit guidance. The SM Group targets an annual growth of 12-15 percent in its net income.

“We are confident that the Philippine growth story, which we saw unfold last year will continue in 2013. In line with this, we will proceed with our aggressive expansion plans and continue to pursue new opportunities for growth,” said SM Prime president Hans T. Sy.

Operations of its malls in China also improved, with its net income climbing 24 percent to P1.10 billion last year from P890 million a year ago.

To date, there are five SM malls in China located in the cities of Xiamen, Jinjiang, Chengdu, Suzhou and Chongqing.

Total revenues of SM Prime jumped 14 percent to P30.73 billion last year.

Of these, 84 percent came from consolidated rental revenues, which expanded 14 percent to P25.9 billion. New rental space came from the opening of SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM City Lanang, and SM Chongqing.

Operating expenses rose 14 percent to P13.99 billion due to expenses related to mall expansion.

Income from operations gained 14 percent to P16.73 billion from P14.62 billion.

For this year, SM Prime will open SM Aura Premier in Taguig City and SM Cauayan in Isabela while SM Megamall will be expanded with the construction of Building D.

By the end of the year, SM Prime will have 48 malls in the Philippines and five in China with an estimated combined gross floor area of 6.7 million square meters.