SM Prime income climbs 12%

MANILA, Philippines - Earnings of SM Prime Holdings Inc., the Sy family’s integrated property firm, jumped double digits in the first nine months of the year as strong revenues from rental and residential projects pushed profits higher.

SM Prime, one of the leading integrated property development companies in Southeast Asia, said its net income in first three quarters grew 12 percent to P13.5 billion as revenues increased nine percent to P47.8 billion.

The company’s consolidated net income for the third quarter alone climbed 12 percent to P3.7 billion from P3.3 billion in the same period last year.

“Our first year as a consolidated property business is proving to be rewarding not only in terms of our strong financial performance. We are now enjoying the scale and the synergy that the whole group brings to the table, which allows us to plan and execute our projects in a manner that will provide greater value and more enhanced lifestyles for our customers.” SM Prime president Hans T. Sy said.

During the first nine months of the year, SM Prime’s rental revenues from retail and commercial space rose 11 percent to P26.4 billion from P23.8 billion a year ago on the back of the new malls that opened and the expansion of existing malls in 2013 and 2014.

The newly-opened and expanded malls, which include SM Aura Premier, SM City BF Parañaque, Mega Fashion Hall in SM Megamall, and SM City Cauayan, provided a combined gross floor area of 527,000 square meters.

Same-store rental, meanwhile, grew seven percent, sustaining the growth it posted in the first half of the year.

“Part of the growth also came from Two E-com Center in Mall of Asia Complex which opened in 2013 and is now fully occupied,” SM Prime said.

For its real estate sales, SM Prime said housing subsidiary SM Development Corp. (SMDC) posted a 12 percent hike in revenues to P3.7 billion in the third quarter this year from P3.3 billion a year ago.

Revenues for the first nine months stood at P16 billion, a slight improvement from last year’s P15.8 billion

SM Prime said the strong performance of its real estate business in the third quarter was driven by the increase in construction accomplishments of sold units in Grace, Shell and Breeze Residences.

“SM Prime expects better results toward the end of the year as more projects are expected to be

completed. New housing projects are also lined up for launch over the next 12 months,” it said.

The retail and commercial group accounted for 55 percent of SM Prime’s consolidated revenues while real estate sales accounted for 33 percent of its consolidated revenues.

SM mall’s cinemas generated P913 million in ticket sales, bringing its nine-month ticket sales to P3.3 billion, 21 percent more than the amount recorded in the same period last year.

“The increase was driven by the opening of additional digital cinemas in the new malls and expanded malls and by the launch of international and local blockbuster movies,” SM Prime said.

Amusement and other revenues likewise posted a strong growth, increasing by seven percent in the third quarter to P623 million, and by 20 percent in the first nine months to P2.1 billion.

SM Prime has allocated a capital expenditure budget of P60 billion this year, of which P30 billion is for mall development, P22 billion for residential development, and the remaining for office buildings, hotels and land banking.