SM Prime Q1 profit up 16%

Southeast Asian property giant SM Prime Holdings grew net profit in the first three months by 16 percent year-on-year to P8.8 billion on higher earnings from its rental portfolio and residential development.

Consolidated revenues rose by 14 percent to P26.5 billion while operating income jumped 17 percent to P13 billion, SMPH disclosed to the Philippine Stock Exchange on Monday.

“SM Prime continues to benefit from the overall growth of the Philippine economy that boosts the household income of most families. We are optimistic that we will sustain this performance this year as we continuously expand our core businesses in developing provincial cities across the country,” said SM Prime president Jeffrey Lim.

The mall business, which accounted for 56 percent of the consolidated revenues, grew by 8 percent to P15 billion.

The new malls opened in 2017 and 2018 helped deliver SM Prime’s P12.9 billion in mall rental revenues, also up by 8 percent from the previous year. These malls included SM CDO Downtown Premier, S Maison, SM City Puerto Princesa, SM Center Tuguegarao Downtown, SM City Urdaneta Central, SM City Telabastagan, SM City Legazpi and SM Center Ormoc.

Operating margin of the mall business was steady at 56 percent. Excluding the impact of new malls, same-mall sales growth in the first quarter went up by 7 percent.

Meanwhile, cinema and event ticket sales increased by 5 percent to P1.2 billion, driven by international and local blockbuster movies.

Other mall revenue streams, which included amusement, bowling, ice-skating and merchandise sales, also improved by 8 percent to P881 million.

SM Prime is scheduled to open four new malls this year: SM Center Dagupan in Pangasinan, SM City Olongapo, SM City Butuan in the Caraga Region and SM Mindoro Citimall in Zamboanga.

The residential group, led by SM Development Corp. (SMDC), recorded a 23-percent increase in revenues to P9.2 billion. This accounted for 35 percent of the company’s total business.

As a measure of future revenue growth, SMDC’s reservation sales increased by 20 percent to P17.8 billion in the first quarter. This translated to a 19-percent growth in number of units to 4,585.

SM Prime is scheduled to launch 15,000 to 20,000 residential units across its high-rise and mid-rise building and single-detached house and lot projects this year.

Other businesses reported a consolidated revenue growth of 14 percent in the first quarter to P2.3 billion. Revenues from commercial properties group and hotels and convention centers contributed 9 percent to the overall consolidated revenues.