SM Prime heads for another banner year

MANILA, Philippines — SM Prime Holdings Inc. (SM Prime) is poised for a banner year as the company continues to see growth across all its business segments this year.

Fresh from a record-high P40 billion in consolidated net income last year, the listed integrated property developer of the Sy family could be up for another banner year in terms of profitability in 2024, according to its president Jeffrey Lim.

“In terms of net income, it is possible because last year was the highest because it was after the pandemic. So I think this year will probably be a banner year,” Lim said.

Earnings of SM Prime in the first half grew by 13 percent to P22.1 billion from the P19.4 billion in the same period in 2023.

According to Lim, the company is focused on keeping a sustainable growth in the coming years.

“Basically, we manage the risks. We want something that is sustainable, not like this year your growth is like 50 percent and the next year it goes down to like five or 10 percent. So we always plan forward and ensure the execution of the plan,” he said.

Celebrating its 30th anniversary as a public company this year, SM Prime continues to expand its core businesses across the country.

On Oct. 25, the company opened SM City J Mall, its fourth mall in Metro Cebu, eighth in the Visayas and 87th in the Philippines.

For next year, Lim said SM Prime would revisit its earlier planned $1 billion real estate investment trust (REIT) listing.

The company has decided to postpone the initial public offering this year given the interest rate environment and market volatility.

“We’ll have to look into it again now that interest rates are coming down. We’ll probably look at it for next year,” Lim said.

Lim said the company is still looking at the possibility of raising about $1 billion through the listing of its REIT unit.

“If we will do one, it has to be of a size that will be attractive to foreign investors because you have to have the size and liquidity,” he said.

However, he added that pushing through with the REIT listing would also depend on the company’s need to raise funds.

“We’re just taking it slow on this because as you can see, we have the euro medium term note (EMTN), so we have other options. So if the right opportunity is there, then we will consider, but it is not at the top of the list because we are able to get funds to expand,” Lim said.

Last May, SM Investments Corp. (SMIC) and SM Prime announced the establishment of a $3-billion multi-issuer EMTN program.

Jointly established by SMIC subsidiary SMIC SG Holdings Pte. Ltd. and SM Prime subsidiary SMPHI SG Holdings Pte. Ltd., the EMTN program will allow the companies to tap the offshore bond market to fund its continued growth and expansion.

SMIC raised $500 million from the first tranche of its EMTN program in July, marking its largest offshore bond issuance since 2014.