SM Prime posts 15% income growth

MANILA, Philippines - SM Prime Holdings Inc., the largest mall developer and operator in the Philippines, continued its robust earnings growth in the second quarter on the back of strong consumer spending.

In a regulatory filing, the newly-consolidated property arm of tycoon Henry Sy reported a P2.85-billion profit in the second quarter, up 15 percent from P2.49 billion a year ago.

This was supported by a 16-percent growth in revenues to P8.72 billion from P7.53 billion a year earlier.

 â€œNew malls opened in 2012 and 2013 with a total gross floor area of 698,000 square meters (sqm) largely pushed rental revenues higher, add to that the higher contribution of SM’s China malls,” SM Prime said.

Specifically, SM Prime has started commercial operations of SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier and SM Aura Premier.

The latest figures allowed SM Prime to post P5.64 billion in earnings in the first half, 15 percent higher compared with P4.92 billion a year ago.

“Revenues for the January to June period expanded 14 percent to P16.55 billion from P14.57 billion during the same period the past year,” SM Prime said, adding that same-store rental picked up seven percent.

In the first semester, operating expenses rose 13 percent to P7.71 billion from P6.79 billion “due to new malls opened in 2012 and 2013 and the increase in administrative expenses and film rentals,” SM Prime said

Hence, income from operations climbed 14 percent to P8.84 billion from P7.78 billion last year.

The country’s largest mall builder expects growth to remain strong for the rest of the year.

 â€œSM Prime continues to deliver strong revenue growth affirming our positive outlook for 2013,” said SM Prime president Hans T. Sy.

“The increasing patronage and support that SM Supermalls receive from its customers drive us to deliver better services and concepts that cater to the needs of everyone,” Sy added.

By the end of this year, SM Prime will have 48 malls in the Philippines, up from the current 46, and five in China with an estimated combined gross floor area of 6.9 million sqm.

For the next three years, SM Prime allotted P88 billion to build new malls and expand existing shopping centers in the Philippines and China.

SM Prime will become the umbrella firm of the SM Group’s property businesses. Late in May, holding firm SM Investments Corp. consolidated SM Prime, residential builder SM Development Corp., private firm SM Land Inc. and Highlands Prime Inc. in a P279-billion transaction that created Southeast Asia’s largest integrated property firm.