Property giant SM Prime Holdings Inc. grew its net profit last year by 17 percent year-on-year to a record high P32.2 billion on a double-digit growth in shopping mall space rental and residential development businesses.
In the fourth quarter alone, SM Prime grew net profit by 16 percent year-on-year to P8.7 billion on the back of a 13-percent year-on-year growth in revenues to P29.5 billion.
For the full year 2018, SM Prime’s consolidated revenues went up by 14 percent to P104.1 billion.
“The successes and achievements we are reaping today are the hard work, strategy and partnerships we built five years ago when we consolidated all the key property companies of SM Group under SM Prime. Driven by our goal to deliver more innovative and sustainable lifestyle cities, SM Prime is aiming to sustain this growth trajectory in the coming years,” SM Prime president Jeffrey Lim said in a press statement on Monday.
The company’s shopping mall revenues surged by 11 percent year-on-year to P59.3 billion last year, mostly driven by mall rental which grew by 11 percent to P50.5 billion.
The increase in revenue was attributed to rising contribution of rentals from new and expanded malls that were launched mostly in the developing provincial areas of the Philippines from 2017 to 2018.
Excluding the impact of newly built mall space to allow for a more accurate comparison, same-mall-sales growth was at 8 percent across all mature malls.
Meanwhile, SM Prime cinema and event ticket sales improved by 9 percent to P5.2 billion in 2018. Revenues from amusement and merchandise sales also increased by 14 percent to P3.6 billion as additional outlets opened in new malls.
Mall operating income improved by 13 percent in 2018 while operating margin moved up to 54 percent from 53 percent in the previous year.
To date, SM Prime has 72 malls in the Philippines offering 8.3 million square meters (sq m) of gross floor area (GFA). It also operates seven malls in mainland China with 1.3 million sq m of GFA as of end-2018.
SM Prime’s residential group, led by SM Development Corp. (SMDC), grew revenues last year by 22 percent to P36.5 billion on higher construction accomplishments of projects launched from 2015 to 2017.
As an indicator of future revenue growth, SMDC’s reservation sales grew by 25 percent last year to P72.3 billion.
SM Prime is scheduled to launch between 15,000 and 18,000 residential units this 2019, including high-rise buildings, mid-rise buildings and single detached house and lot projects.
Meanwhile, other businesses of SM Prime grew revenues last year by 7 percent to P8.4 billion. The commercial properties and the hotels and convention centers business segments contributed a combined revenue growth of 18 percent in 2018, mostly attributed to the opening of ThreeE-Com Center, FiveE-Com Center and Conrad Manila.
SM Prime has 11 office buildings with a combined GFA of 623,000 sq m to date. It also operates six hotels with over 1,500 rooms, four convention centers and three trade halls.