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SM Prime profit rises

/ 05:03 AM October 23, 2018

The property arm of the SM Group posted higher earnings in the nine months through September this year with revenues bolstered by its massive shopping mall business and higher residential sales.

SM Prime Holdings Inc. said in a stock exchange filing on Monday that net income during the period rose 17 percent to P23.44 billion compared to the same period last year. Its total revenues were up 15 percent to P74.56 billion.

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Its mall segment earnings benefited from the new shopping centers it opened in provincial areas.

Total mall sales, accounting for 58 percent of the company’s revenues, increased 12 percent to P43.3 billion. Same mall sales growth was up 8 percent while rental revenues gained 12 percent to P36.83 billion.

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The growth was partly supported by movie and event ticket sales. SM Prime said sales from those segments rose 17 percent to P3.92 billion during the nine-month period. It added that other revenues, which include leisure, entertainment and merchandise sales, went up 4 percent to P2.51 billion.

SM Prime has 78 malls, of which 71 are in the Philippines and seven in China. These have a total gross floor area (GFA) of 9.5 million square meters (sqm). SM Prime opened four malls in the first nine months of the year namely SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan, SM City Telabastagan in Pampanga and SM City Legazpi in Albay. SM Center Ormoc in Leyte is scheduled to launch this fourth quarter of 2018, along with Luxe Duty Free in Mall of Asia Complex, Pasay City, which is an additional upscale shopping destination in the Bay Area.

“SM Prime’s continuous growth as reflected in our first nine-month report shows the results of our strategic expansion in various developing cities in the country. Through the solid performances of our core businesses, we are positive that we will deliver the net income growth we committed when we integrated five years ago. We intend to keep this growth trajectory to enrich more lives in the communities that we serve and deliver more sustainable integrated developments for the betterment of our country,” SM Prime President Jeffrey C. Lim said in the filing.

In terms of residential sales, SM Prime said the segment grew revenues by 23 percent to P25.26 billion. Operating income registered a 34-percent increase to P8.29 billion while gross profit margin also improved to 50 percent from 49 percent of same period last year.

“The increase is primarily due to higher construction accomplishments of projects launched in 2015 to 2017 namely Shore 2, Fame, South, Spring, Shore 3 and S Residences and continued increase in sales take-up of various projects due to strong demand fueled by international buyers, overseas Filipinos’ remittances, and rising disposable income of the emerging middle class,” SM Prime said.

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