SM Prime’s Q1 net profit up 176% to P12.6B
PROPERTY giant SM Prime Holdings Inc. posted a 176-percent growth in first quarter net profit to P12.6 billion as extraordinary gains were booked on top of the double-digit rise in core businesses.
The three-month net profit of the Sy-led company – now one of the largest integrated property developers in Southeast Asia – included P7.4 billion in one-time gains from the sale of marketable securities.
But excluding the one-time gain, core net income grew by 14 percent to P5.2 billion in the first quarter. The growth was higher than the 11 percent growth posted in the same period last year. Consolidated revenues also increased by 9 percent to P16.7 billion year-on-year.
SMPH president Hans Sy said: “2015 promises to be a strong year and the first quarter numbers seem to reflect that. There are a lot of reasons to be optimistic with consumer spending getting a boost from lower oil prices and improved consumer confidence. The strong economy provides much motivation for us to expand and grow our business more aggressively to take advantage of new opportunities, particularly in the provincial areas. We can grow all areas of business, malls, residences, commercial and tourism-related developments together to achieve synergies.”
Rental revenues from retail and commercial space, which accounted for 57 percent of the consolidated revenues, grew by 10 percent year-on-year to P9.4 billion in the first quarter. The growth was led by the significant increase in rental revenues, primarily from the new malls that opened and the expansion of existing malls in the last two years. These were SM Aura Premier in Taguig, SM City BF in Parañaque, Mega Fashion Hall in SM Megamall in Mandaluyong, SM City Cauayan in Isabela and SM Center Angono in Rizal. Combined, these new and expanded malls have a total gross floor area of 564,000 square meters.
Growth was also partly driven by the company’s increasing office space. Aside from TwoE-comCenter in Pasay, SM Prime recently launched SM Cyberwest in Quezon City which is now fully occupied. Meanwhile, same-store rental grew by 7 percent, sustaining the growth posted in 2014.
On the other hand, the mall’s cinemas generated ticket sales of P1.0 billion,slightly down from P1.1 billion with a slight decrease in blockbuster movies shown in the first quarter of 2015 versus the same period last year. Meanwhile, amusement and other revenues increased by 32 percent to P900 million in the first quarter of 2015. The increase was mainly due to the strong patronage of amusement rides, especially the opening of Sky Ranch Pampanga. Cinemas and amusements accounted for 11 percent of SM Prime’s consolidated revenues during the period.
SMPH’s housing group, which contributed 32 percent to consolidated revenues, recorded a 7 percent gain to P5.4 billion in real estate sales in the first quarter year-on-year. This allowed the group to post a 37 percent increase in net income to P 1.3 billion in the period under review. The growth was mainly driven by the increase in the sales take-up and higher construction accomplishment of projects launched in 2010 to 2013, namely Shore Residences in Pasay, Green Residences in Manila, Wind Residences in Tagaytay, Grace Residences in Taguig and Shell Residences in Pasay.
As an indicator of future growth, reservation sales grew by 47 percent year-on-year to 3,721 units in the first quarter of 2015 translating to a 34 percent increase to P9.5 billion in value terms in the same period over the same period last year. Most of the reservation sales were generated from Shore Residences and Air Residences projects in Pasay and Makati City, respectively.
This year, SMPH aims to open a total of four new malls. Three of which are located outside of Metro Manila, namely SM City San Mateo in Rizal, SM City Cabanatuan in Nueva Ecija, and SM Seaside City Cebu. In Metro Manila, SM City Sangandaan in Caloocan will also open. SM Prime is also expanding two existing malls, SM City Lipa in Batangas and SM City Iloilo. In total, these malls will add almost 800,000 square meters of gross floor area.
SMPH’s residential unit will launch at least five new high rise condominiums with about 11,000 units in total in the cities of Las Piñas, Makati, Pasay and Parañaque, and at the Mall of Asia Complex.
On the office segment, FiveE-comCenter will be ready for occupancy.
In the hotels and convention centers business, SM Prime is set to launch the Conrad Manila hotel by the end of 2015 at the Mall of Asia Complex.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.