Photo taken from SM Prime Holdings Facebook account
MANILA, Philippines – The country’s largest shopping mall developer SM Prime Holdings Inc. grew its nine-month net profit by 15 percent year-on-year to P7.4 billion, underpinned by growth from new malls, same store sales and improved operations in China.
SM Prime’s nine-month net profit accounted for about 72 percent of the P10.3 billion consensus bottomline forecast for the tycoon Henry Sy-led company.
For the third quarter alone, SM Prime jacked up its net income by 16 percent year-on-year to P2.48 billion, the company disclosed to the Philippine Stock Exchange on Monday.
SM Prime’s January to September revenues amounted to P22.1, up by 15 percent from the level in the same period last year while cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) went up by 12 percent year-on-year to P14.6 billion for an EBITDA margin of 66 percent.
Revenues from July to September alone reached P7.52 billion, for a 15 percent year-on-year increase while EBITDA for the quarter grew by 13 percent year-on-year to P4.89 billion for an EBITDA margin of 65 percent.
“Our performance for the first nine months of 2012 gives us confidence in reaching our full-year target. We think that consumer sentiment will remain positive on the back of a strong domestic economy. Moreover, we anticipate this trend to continue as we approach the holiday season, when consumer spending is particularly strong,” SM Prime president Hans Sy said.
The nine-month growth was largely attributed to rentals from new Philippine malls opened in 2010 and 2011, same store sales of 8 percent, and the improved performance of SM’s China malls.
On the expenditure side, operating expenses during the first nine months increased by 14 percent to P10.45 billion from the comparative last year due to higher administrative expenses, particularly, utilities and manpower expenses, business taxes, and film rentals. Income from operations increased by 15 percent to P11.65 billion from the same period last year.
In terms of gross revenues, the four malls in China contributed P1.9 billion in the nine-month period this year compared to P1.49 billion last year, accounting for 9 percent of consolidated revenues versus 8 percent in the comparative period.
Gross revenues of the four overseas malls increased by 27 percent this year compared to the same period last year, in turn attributed to improvements in the average occupancy level, lease renewals, and the opening of SM Xiamen Lifestyle and SM Suzhou which added 182,000 square meters of gross floor area.
The average occupancy rate for the four malls in China is now at 96 percent.
SM Prime now has 46 supermalls in the Philippines with a total gross floor area of 5.5 million square meters. Its four supermalls, located in the cities of Xiamen, Jinjiang, Chengdu and Suzhou in China, have a total gross floor area of 600,000 square meters.
From year to date, SM Prime opened SM City Olongapo in Zambales, SM City Consolacion in Cebu, SM City San Fernando in Pampanga, SM City General Santos in South Cotabato and SM Lanang Premier in Davao City. By December, SM Chongqing in China is scheduled to open, bringing the mall group’s combined gross floor area to 6.3 million square meters.