SM Prime recurring profit hit record P23.8B in 2016

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.

This is the highest level of recurring net income chalked up by SM Prime, one of the largest property developers in Southeast Asia.

Including extraordinary trading gains from securities that bloated previous year’s earnings, net profit slipped last year by 15.9 percent from P28.3 billion in 2015.

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 statement.

Mall revenues grew by 9 percent to P48.6 billion as SM Prime expanded its shopping mall footprint while growing rental revenues from old malls.

Rental revenues from shopping malls improved by 10 percent to P41 billion, driven by additional retail space of 1.5 million square meters (sq m) 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.

Mall operating income likewise improved by 9 percent to P25.8 billion last year while operating margins stood at 53 percent. —DORIS DUMLAO-ABADILLA