Record high: SMPH profit tops P45B
Real estate giant SM Prime Holdings Inc. (SMPH) shattered its own earnings record as rental income and sales boosted the company’s profitability despite headwinds in the residential and office sectors last year.
The Sy family-led developer disclosed to the stock exchange on Monday that its net income in 2024 had jumped by 14 percent to an all-time high of P45.6 billion, as all its business units registered gains.
Consolidated revenues likewise climbed by 10 percent to P140.4 billion, another record high.
“The results we achieved in 2024 provide a solid foundation for future growth,” SM Prime president Jeffrey Lim said in a statement.
READ: SM Prime prepares to enter premium residential market
“We have several key projects in development that we expect will benefit from this positive momentum,” Lim added.
Malls remained the company’s top revenue contributor at 55 percent, followed by the residential segment at 34 percent, hotels and convention centers at 6 percent, and office and warehouses at 5 percent.
In the fourth quarter alone, SM Prime’s net income rose by a fifth to P11.8 billion, while its top line grew by 14 percent to P40.6 billion, as its businesses benefited from strong holiday spending, the opening of two new malls (SM City Caloocan and SM J Mall Mandaue), higher real estate sales and blockbuster film releases.
This came despite the real estate sector’s overall weakness in 2024, due mainly to the exit of Philippine offshore gaming operators.
Data from Colliers Philippines showed that it would take the market more than eight years to fully absorb the unsold residential units in Metro Manila, mostly in the middle-income segment.
Still, SM Prime remained bullish on its prospects this year.
Earlier, the company announced plans to venture into both the low-cost and high-end residential markets this year to combat the challenges in the middle-income market.
All of SM Prime’s residential projects will be consolidated under the SM Residences brand, which is expected to launch a 200-hectare premium development in “early 2025.”
Other projects in the pipeline have price tags ranging from P25 million to more than P100 million, according to SM Prime.
Stock broker Unicapital Securities Inc. said in its 2025 market outlook report that the property sector’s residential segment may remain challenging this year due to “lengthened remaining inventory life.” It also noted, however, that inventory levels may decline to 11 months from 12 months as the arrival of new supply slows and demand recovers.
SM Prime plans to spend P33 billion this year to widen its portfolio of malls, hotels and offices amid growing foot traffic and a booming tourism industry.
A bulk of the total, or P21 billion, will go to expanding its mall gross floor area by 205,400 square meters (sq m) and redeveloping 124,488 sq m of existing mall space.
A total of P6 billion will be set aside for the construction of two convention facilities, renovation of hotel rooms and new restaurants. The remaining P6 billion will be used to develop new office towers and workspaces.
