SM Prime posts 14% jump in nine-month net profit

SM Prime Holdings Inc., the country’s biggest shopping mall developer and operator, said profits in the nine months through September rose 14 percent to P8.43 billion as it recognized earnings from newly opened malls.

SM Prime said in a statement that gross revenues during the period grew by 12 percent to P24.77 billion. Rental income, which accounted for 85 percent of the company’s revenues, increased 12 percent to P20.94 billion as it opened six new malls since 2012.

These are SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier and SM Aura Premier, adding close to 700,000 square meters of floor area.

SM Prime ended the period with 47 shopping centers with a total floor area of 6 million sqm. It also operates five shopping malls in China.

The company said same-store rental growth would still be up 7 percent this year, removing the contribution of new shopping malls, as the company banks on increasing consumer spending, driven by money from Filipinos overseas and the local outsourcing industry.

SM Prime president Hans Sy said the company’s nine-month performance would likely be sustained through the end of the year.

He also noted the increasing contribution of its China-based malls, which came in at 9 percent during the period. In terms of rental revenues, China operations contributed 10 percent to SM Prime’s consolidated rental revenues.

Gross revenues of the five malls in China grew faster than Philippine operations, or 14 percent in 2013, largely due to improved mall productivity and lease renewals for the first three malls opened, namely SM Xiamen, SM Jinjiang and SM Chengdu.

Average occupancy rate for the first three malls was at 93 percent, SM Prime added.