SM Prime nets P9.8B in H1

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, led by a double-digit rise 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, the net profit of the Sy family-led 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 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 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.

“The increase in rental revenue was primarily due to the new malls opened in 2013 and 2014 plus the shopping spaces added in existing malls namely in SM Megamall, which contributed an additional 101,000 square meters,” the company said.

There were close to 550,00 sqm of total mall space added in the past two years, expanding the mall portfolio by 8 percent to 6.57 million sqm.

Counting only businesses from old malls for better comparison, same-store rental growth was at 7 percent year-on-year for both the second quarter and six-month period.

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 the first six months, real estate sales declined by 4 percent to P11.9 billion.

However, SM Prime said it expected its housing unit group to “sustain its growth for the rest of the year as more projects reach completion while new housing projects are lined-up for launch over the next 12 months.”