SM Prime Holdings net profit up 54% in 2015
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 nonrecurring 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 was a reflection of the overall expansion of the economy that continued 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.
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 revenues was achieved on the back ofSM Prime’s expansion across its business portfolio since 2013. Excluding the new malls and expansions, same-store rental growth posted a 7-percent increase in terms of revenues.
Among the new malls that opened beginning 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. The new malls contributed a total gross floor area (GFA) of 728,000 square meters (sq m).
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 171,000 sq m of GFA to the company’s portfolio.
For the period, the 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, posted P22.2 billion revenues in 2015. This was flat compared to the previous year due to lower revenue recognition from the almost completed housing projects launched in 2011 and 2012.
Recently-launched projects under the SM Development Corp. (SMDC) continued to enjoy brisk sales as the firm posted higher reservation sales of 12 percent year-on-year to 14,390 units in 2015.
An indicator of future revenue growth, SMDC achieved a 15-percent increment in sales value worth P39.8 billion. SMDC contributes 93 percent to the housing group’s real estate sales.
Consolidated costs on real estate dropped by 2 percent to P12 billion mainly due to improving cost efficiencies, tighter monitoring and control of construction costs. This meant higher gross profit margin on real estate sales of 46 percent in 2015, higher compared to 44 percent in 2014.
