SM Prime incurs 46% drop in H1 net income

MANILA, Philippines — SM Prime Holdings Inc. (SM Prime), the Sy-owned property developer, posted a first half net income of P10.4 billion, down 46 percent.

This as revenue weakened because of slow sales caused by the coronavirus disease 2019 or COVID-19 pandemic.

SM Prime generated P43.7 billion in revenue, down 23 percent compared to the P57 billion posted a year ago.

SM Prime president Jeffrey Lim said the first half of the year has been one of the most difficult period for the company, but he assured stakeholders that the company would continuously strategize to recover.

“The first half of 2020 has been one of the most challenging period we’ve faced as a company. With the government maintaining the implementation of quarantine protocols in most key areas in the Philippines where our businesses are, SM Prime is committed to sustaining its operations, while adhering to the strict safety measures implemented by the government and continuing to provide convenience to our customers,” Lim said.

Moving forward, he said, SM Prime continues to innovate and strategize to recover from the unprecedented effects of the pandemic COVID-19, including continuous support in the operations of tenants, as well as assistance to various stakeholders across the country.

Most affected was the mall business, with rent income dropping 44 percent to P13.1 billion during the period from P23.3 billion a year ago on the back of lower mall revenue of P14.4 billion, 49 percent lower than the P28.1 billion posted a year ago.

“This is driven primarily by waived rent and rental discounts granted to tenants since the start of the quarantine measures in March, amount- ing to P11 billion as of end of June,” SM Prime said.

On the other hand, SM Prime’s residential business, led by SM Development Corp. (SMDC), grew its revenue 11 percent to P23.7 billion in the first half of the year, higher than the P21.4 billion recorded a year ago.

SM Prime’s commercial properties business’ revenue has grown 16 percent to P2.5 billion during the period, while operating income registered at P2.2 billion or 22 percent higher than the P1.8 billion posted a year ago.

The offices business of SM Prime has business process outsourcing (BPO) offices as primary tenants, which were allowed by the Philippine’s Inter- Agency Task Force (IATF) to continue its operations throughout the quarantine period.