SM Prime nets P28.3B
REGIONAL property giant SM Prime Holdings Inc. grew its net profit last year by 54 percent to P28.3 billion, buoyed by one-time trading gains on securities booked early in the year.
Excluding the P7.4 billion non-recurring gains, SM Prime’s core net profit last year increased by 14 percent to P20.9 billion. This was attributed to an 8-percent increase in consolidated revenues to P71.5 billion in the same period.
“SM Prime sustained its overall net income growth in 2015 as the malls’ overall operations led the performance of the group. This is a reflection of the overall expansion of the economy that continues to be driven by the 6.2 percent growth in household consumption. We believe we could sustain this growth in 2016 as we continue to focus on enhancing the synergies across our core business units as an integrated property developer,” SM Prime president Hans Sy said in a press statement on Monday.
Rental revenues from malls and commercial spaces – which accounted for 57 percent of the consolidated revenues – grew by 12 percent to P40.7 billion.
The strong growth in rental revenue was sustained by SM Prime’s expansion across all its business portfolio since 2013. Excluding the new malls and expansions, same-store rental growth continued to post a 7-percent increase in rental revenue.
Among the new malls opened since 2013 were: SM Aura Premier, SM City BF Parañaque, Mega Fashion Hall in SM Megamall, SM City Cauayan in Isabela, SM Center Angono in Rizal, SM City San Mateo in Rizal, and the expansion of SM City Bacolod. These contributed additional total gross floor area (GFA) of 728,000 square meters.
Rental growth was also supported by the opening of two new office buildings – SM Cyberwest in Quezon City and FiveE-comCenter in Pasay City, both of which are fully occupied. Combined, these added GFA of 171,000 sqms.
For the period, SM housing group’s net income increased by 8 percent to P5.1 billion.
SM Prime’s real estate sales – which accounted for 31 percent of consolidated revenues – sustained its revenues at P22.2 billion in 2015, flat from the level in the previous year. This was due to lower revenue recognition from the almost completed housing projects that were launched in 2011 and 2012.
Cinema and event ticket sales – which represented 7 percent of consolidated revenues – recorded a 12 percent growth in business last year to P4.8 billion. International movies continued to dominate Philippine cinema.
Other revenues, which consisted of amusement income from rides, bowling and ice skating operations, merchandise sales from snack-bars and sale of food and beverages in hotels stood at P3.8 billion, up by 14 percent. One key growth driver was the opening of Sky Ranch Pampanga, improvement in hotels’ food and beverages income as well as an increase in sponsorship income.
To date, SM Prime has a total of 56 malls in the Philippines with total retail space of 7.3 million square meters. In China, it has six shopping malls with a GFA of 900,000 sqms. including the recently opened SM City Zibo. Taking into account both Philippine and China malls, SM Prime has a total retail space of 8.3 million sqms.
SM Prime presently has 27 residential projects in the market, 25 of which are in Metro Manila and two in Tagaytay.
On office property stock, SM Prime has five office buildings with an estimated gross floor area of 318,000 sqms.
For hotels and convention centers, the 347-room Conrad Hotel Manila is expected to open in the second half 2016. This is seen to enhance the value of the properties within the whole Mall of Asia (MoA) Complex, given that this will be the first six-star hotel in the Pasay City area.
