Recovering malls drove SM Prime 2021 profit higher by 21%

SM Prime Holdings (SMPH) grew its 2021 net profit by 21 percent to P21.8 billion as more relaxed mobility restrictions allowed the country’s largest property developer to boost earnings from the pandemic-battered shopping mall business.

While the figure is still 57 percent of prepandemic net income, it hit close to analysts’ consensus forecast that the firm would end the year with a P22.2-billion bottom line.

From October to December 2021 alone, net profit amounted to P6.2 billion, up by about 72.7 percent year-on-year, as foot traffic sharply improved due to the onset of the holiday season and as quarantine restrictions were eased.

Fourth quarter consolidated revenues amounted to P25.5 billion, 20-percent higher year-on-year, while consolidated operating income increased by 67 percent to P10.8 billion.

P82.3-B consolidated revenues

For the full year, the company’s consolidated revenues hit P82.3 billion, which is at the same level as 2020. Consolidated operating income increased by 11 percent to P32.4 billion.

“As we begin to see the results of the joint effort by the government and private organizations to manage the pandemic, SM Prime is set to pursue business expansions with broader funding options available locally and internationally. We will continue to work with the government in helping the nation rebound from the challenges in the past two years,” SMPH president Jeffrey Lim said in a disclosure to the Philippine Stock Exchange on Monday.

SMPH’s residential business unit, led by SM Development Corp. (SMDC), recorded P45.9-billion revenues, flat from the P46.5-billion level seen in 2020 when the segment made up for the slack in the shopping mall business.

8 new condominiums

SMDC’s sales takeup, an indicator of the revenue growth the company may post in the years ahead, amounted to P98.9 billion in 2021, flat from the previous year’s count of P99 billion.

The residential development arm launched eight new high-rise and mid-rise condominium buildings as well as house and lot residential projects across the country in 2021.

Meanwhile, SMPH’s Philippine mall business reported P24.1-billion total revenues for the year compared with P23.6 billion in 2020.

Rental income from shopping malls also improved by 6 percent to P23 billion.

Biggest IKEA store

With a tamer COVID-19 situation in the last quarter, SMPH was able to launch two new malls: SM City Daet in Camarines Norte and SM City Grand Central in Caloocan City.

SM Prime also opened MOA Square, the commercial space beside the SM Mall of Asia. MOA Square houses the first IKEA store in the Philippines, the biggest IKEA in the world.

In China, SMPH’s international mall business saw a 20-percent increase in revenues at 800 million Chinese renminbi (RMB) compared with 700 million RMB. The increase was attributed to China’s quick return to normalcy after the spread of the COVID-19 virus in the first quarter of 2020.

SMPH’s other businesses, which include offices, hotels and convention centers, generated P6.6 billion in consolidated revenues last year, 4-percent higher from the previous year. INQ