SM Prime nets P24B
Property giant SM Prime Holdings Inc. grew its recurring net profit last year by 14 percent to P23.8 billion on higher earnings from the shopping mall and residential development businesses.
Consolidated revenues expanded by 12 percent last year to P79.8 billion while operating income also rose by 12 percent to P35.3 billion, driven mostly by the continued expansion of its malls as well as the strong sales take-up of housing units, SM Prime disclosed to the Philippine Stock Exchange on Tuesday.
“SM Prime sustained its overall performance in 2016 on the account of focusing more on recurring income stream complemented by the solid performance of the housing group. SM Prime is well-positioned to capture the positive impact of the higher infrastructure spending intended by the government that will also spur overall economic growth of the country,” SM Prime president Jeffrey Lim said in a press statement.
Mall revenues grew by 9 percent to P48.6 billion as SM Prime expanded its shopping mall footprint while growing rental revenues from older malls.
Rental revenues from shopping malls improved by 10 percent to P41 billion, driven by additional retail space of 1.5 million square meters (sqm) of gross floor area (GFA) added in the past two years. Meanwhile, same-mall sales growth was steady at 7 percent.
Cinema and event ticket sales were down by 3 percent to P4.7 billion due to fewer local blockbuster movies shown last year compared with 2015. Revenues from amusement and merchandise sales rose by 16 percent to P3 billion, mostly coming from higher merchandise sales and new amusement centers in the company’s newer malls.
SM Prime ended last year with 60 shopping malls in the Philippines ((7.7 million sqm GFA) and seven in China (1.3 million sqm GFA). This 2017, SM Prime will open at least four new malls in the Philippines with an estimated combined 300,000 sqms of additional shopping space.
Meanwhile, SM Prime’s residential group under SM Development Corp. (SMDC) contributed 32 percent to consolidated revenues, growing by 13 percent to P25.4 billion. The growth was attributed to higher sales take-up on ready for occupancy (RFO) units from condominium projects such as Princeton, M Place, Mezza II and Jazz Residences in Quezon City and Makati. RFO inventory went down by 34 percent to 2,374 units last year from 3,617 units in the previous year.
As an indicator of future revenue growth, SMDC’s reservation sales grew by 18 percent in terms of sales value to P46.7 billion last year. In terms of volume, this translated to a 15-percent improvement on unit sales to 16,320 units mostly from projects that are within and near the Mall of Asia Complex in Pas City, namely S Residences, Shore 2 Residences and Coast Residences.
This year, SM Prime is scheduled to launch 15,000 to 18,000 residential units, including high-rise, mid-rise and horizontal house and lot developments.
Other business segments contributed last year as follows:
-The office property business contributed 3 percent to consolidated revenues amounting to P2.7 billion, up by 32 percent due to new rental revenues from FiveE-comCenter, which is almost 100 percent occupied. This segment has six office buildings, mostly in the Mall of Asia Complex in Pasay City, with an estimated GFA of 371,000 sqm; and,
– The hotels and convention centers unit grew revenues by 32 percent to P3.2 billion, attributed to improvement in occupancy rates and the opening of Park Inn Clark in December 2015 and Conrad Manila in June 2016.
