SM Prime net up 12% to P13.5B

SCREENGRAB from www.smprime.com

MANILA, Philippines–Property giant SM Prime Holdings Inc. grew its net profit in the first nine months of the year by 12 percent year on year to P13.5 billion.

Profit growth, according to the company, was driven by the double-digit rise in rental earnings posted by its chain of shopping malls.

For the third quarter alone, the net profit of SM Prime—one of the leading integrated property development companies in Southeast Asia—also grew by 12 percent year on year to P3.7 billion, tracking the pace seen in the first semester.

“Our first year as a consolidated property business is proving to be rewarding…We are now enjoying the scale and the synergy that the whole group brings to the table, which allows us to plan and execute our projects in a manner that will provide greater value and more enhanced lifestyles for our customers,” SM Prime president Hans Sy said in a statement on Monday.

Revenue in the nine-month period rose by 9 percent year on year to P47.8 billion.

SM Prime’s rental revenue from retail and commercial space grew by 11 percent to P26.4 billion in the first nine months of the year from year-ago level. Recurring rental earnings accounted for 55 percent of SM Prime’s consolidated revenue. Its management attributed the increase in rental revenue mainly to the opening of new malls and the expansion of some of the existing ones in 2013 and 2014.

The malls that added a total of 527,000 square meters in leasing space to the shopping mall portfolio were: SM Aura Premier, SM City BF Parañaque, Mega Fashion Hall in SM Megamall and SM City Cauayan, with a combined total gross floor area of 527,000 square meters.

Excluding recent store openings and expansion, same-store rental growth was at 7 percent, sustaining the growth posted in the first half of the year.

SM Prime is expected to end the year with 50 shopping malls in the Philippines.

In the meantime, real estate sales which accounted for 33 percent of consolidated revenue “continued to show improvements,” the company said.

Residential subsidiary, SM Development Corp. (SMDC), which was folded into the company under a group-wide consolidation, posted a 12-percent year-on-year increase in revenue to P3.7 billion in the third quarter.

SMDC’s revenue for the first nine months stood at P16 billion, slightly higher than the previous year’s P15.8 billion. The company is expecting “better results” toward the end of the year as more projects are scheduled for completion. New housing projects will be launched over the next 12 months.