SCREENGRAB from www.smprime.com
MANILA, Philippines—Local property giant SM Prime Holdings Inc. grew its net profit in the first semester by 12 percent year-on-year to P9.8 billion on the back of double-digit growth in rental revenues as the group cashed in on the opening of new malls and the expansion of SM Megamall.
For the second quarter alone, net profit of the property developer rose at the same pace of 12 percent year-on-year to P5.22 billion. This was on the back of an 11-percent rise in consolidated revenues to P18.08 billion, stronger than the previous quarter’s growth of only 3 percent.
Six-month consolidated revenues were up by 7 percent year-on-year to P33.42 billion.
“The results were very encouraging as we sustained our growth from the previous quarter. This gives us confidence to meet our full year target. We are looking forward to hitting our key targets for the rest of the year. This should pave the way in achieving our 5-year roadmap set in April of this year,” SM Prime president Hans Sy said in a press statement.
Rental revenues, which accounted for half of consolidated revenues, increased by 13 percent year-on-year to P9.11 billion in the second quarter. In the first six months, rental revenues rose by 12 percent to P17.67 billion.
Real estate sales, which accounted for 38 percent of consolidated revenue, grew by 9 percent year-on-year in the second quarter to P6.89 billion. This was a turnaround from the 17-percent decline in the previous quarter, in turn attributed to more projects that were almost completed in the period under review, particularly the Grace and Breeze Residences.
Other businesses performed year-on-year as follows:
Cinema ticket sales increased by 11 percent to P1.29 billion in the second quarter and by 23 percent in the first semester to P2.35 billion with the opening of digital cinemas at the new malls and the showing of blockbuster movies.
Amusement and other revenues increased by 24 percent to P791 million in the second quarter and by 27 percent to P1.5 billion in the first half due to the strong demand for amusement rides and additional recreational facilities provided by management in various malls.
On the expenditure side, SM Prime’s consolidated operating expenses – excluding real estate related costs – increased by 12 percent to P6.62 billion in the second quarter and by 13 percent to P12.51 billion in the first six months. Bulk of the increase came from depreciation expenses attributed to new malls added in the past 12 months while film rentals were also higher as they corresponded to the growth in cinema ticket sales.
Consolidated costs of real estate stood at P3.82 billion in the second quarter, almost flat from last year’s figure of P3.83 billion which was attributed to “efficient management and the reigning-in of construction costs.” In the first six months, consolidated costs of real estate declined by 10 percent year-on-year to P6.75 billion, resulting in a gross margin enhancement of 43 percent in the first half from only 39 percent in the same period last year.