Photo taken from SM Prime Holdings Facebook account
Property giant SM Prime Holdings grew its nine-month net profit by 15 percent year-on-year to P20.05 billion, driven by higher shopping mall and residential revenues.
For the third quarter alone, SM Prime’s net profit rose by 16 percent year-on-year to P5.66 billion.
“SM Prime’s performance in the third quarter is a testament to the buoyant overall economy that benefits the whole property market. The timely expansion of our malls and launches of our residential projects in the provinces are positively contributing to the strong performance of our company. Given all these, we remain optimistic that we are on track to meet our growth target this year,” SM Prime president Jeffrey Lim said in a press statement.
SM Prime’s consolidated revenue for the nine-month period grew by 12 percent year-on-year to P64.69 billion while operating income grew by 16 percent to P30.14 billion for the same period. The growth was attributed to additional rental revenues from mall expansions, improvement in same-mall-sales and higher contribution from residential sales.
Nine-month mall revenues grew by 10 percent year-on-year to P38.58 billion, contributing 60 percent of the consolidated revenues.
Mall rentals for the nine-month period went up by 10 percent year-on-year to P32.83 billion, primarily due to the expansions and new malls that opened in 2016 and 2017. Same-mall-sales also sustained a 7-percent growth. On the other hand, cinema and event ticket sales slipped by 3 percent year-on-year to P3.34 billion due to fewer blockbuster movies. Revenues from amusement and merchandise sales, however, expanded by 26 percent to P2.40 billion.
Consolidated mall operating income improved by 12 percent to P21.38 billion while operating margin was maintained at 55 percent in the same nine-month period.
Currently, SM Prime has 65 shopping malls in the Philippines and seven in China with a gross floor area (GFA) of 8 million square meters (sqm) and 1.3 million sqms, respectively.
Two more SM malls are set to open before yearend, namely: SM Center Lemery in Batangas and SM Center Pulilan in Bulacan, which will bring provincial malls to 44 from 38 in 2016.
SM Prime’s residential group’s revenues – which accounted for 32 percent of total business – expanded by 10 percent to P20.50 billion in the nine-month period. This was attributed to the increase in sales take-up of ready-for-occupancy (RFO) units and construction accomplishments of residential arm SM Development Corp. (SMDC).
As an indicator of future revenue growth, SMDC’s reservation sales increased by 18 percent year-on-year to P42.08 billion while unit sales increased by 3 percent to 12,963 units.
Other businesses, including those from office rental and hotel portfolio, grew by 39 percent year-on-year to P5.76 billion in the first nine months. The growth came from rental revenues of FiveE-comCenter and Conrad Manila, which were launched in November 2015 and June 2016, respectively.
To date, SM Prime has six office buildings with a combined GFA of 383,000 sqms. It also has six hotels with over 1,500 rooms, four convention centers and three trade halls in its portfolio.