SM Prime hits P6.6-B income as mall domination continues

Southeast Asian property giant SM Prime Holdings Inc. reported a 13-percent growth in first quarter net income to P6.6 billion on higher earnings from shopping mall and residential developments.

SM Prime—one of the most valuable companies in the the country—recorded consolidated revenues of P20.51 billion for the first three months, an increase of 12 percent from the same period last year.

“Our strong performance in the first quarter gives us high confidence that we are on track to meet our growth targets in terms of revenues and income for the full year. As we continue our strategic rollout of projects across our properties, we are optimistic that our growth will be sustained by the overall expansion of the Philippine economy,” SM Prime president Jeffrey Lim said in a press statement yesterday.

Rental revenues rose by 12 percent year-on-year to P12.07 billion with the opening of new malls and expansion of old ones in the last two years. The developments added a total gross floor area (GFA) of 1.1-million square meters to the firm’s total portfolio.

Of the total rental revenues, 88 percent was contributed by the malls while the rest was generated from office and hotels and convention centers. SM Prime currently has 60 shopping malls in the Philippines and seven in China with a combined GFA of 9 million square meters.

Excluding the impact of new malls and mall expansions, same-store rental growth stood at 7 percent.

Room rentals from hotels and convention centers contributed to the increase with the opening of deluxe hotel Conrad Manila at the Mall of Asia complex in June 2016. The group also reported an improvement in average room rates and occupancy rates.

On the residential segment under SM Development Corp. (SMDC), revenues rose by 6 percent to P6 billion, primarily due to construction progress on high-rise projects launched in 2014 up to 2015.

Property developers book revenues from real estate sales of high-rise residential projects offered via the pre-selling method based on construction progress. —DORIS DUMLAO-ABADILLA