SM Prime reports gains in Q3 as malls open for business

Property giant SM Prime Hol­dings saw some pickup in its third quarter earnings coming from a challenging second quarter when most businesses went on a pandemic-induced standstill, yet overall results were still a far cry from earnings booked last year.

From January to September, SM Prime reported P14.4 billion in consolidated net profit, down by 48 percent year-on-year as mall rental revenues plunged due to rental waivers in the first semester.

This suggested that SM Prime booked P3.97 billion in net profit for the third quarter alone. While this marked a 52-percent year-on-year decline compared to last year’s level, there was an 89-percent improvement compared to the P2.1-billion bottom line seen in the second quarter, the lowest quarterly profit the firm has seen since it became an integrated property developer in 2013.

“SM Prime’s core busine­sses, primarily its malls, showed slight recovery as the government started to reopen more industries to help the economy going into the second half of the year. We have also implemented tighter controls on our expenses achieving a major reduction in operating expenses quarter on quarter,” Jeffrey Lim, SM Prime president, disclosed to the Philippine Stock Exchange on Monday.

He said the company would continue to provide assistance to stem the spread of the virus.

Consolidated revenues reached P60.7 billion at end-September, 29 percent lower year-on-year.

SM Prime’s Philippine mall business registered P18.3 billion revenues during the nine-month period, 57-percent lower from last year’s P42 billion. Of these, rental income stood at P16.8 billion, down by 52 percent in the same period last year.

Waiving mall rental fees and discounts since the start of the quarantine measures in mid-March to end-June had cost the property developer P11 billion.

SM Prime’s residential business, led by SM Development Corp., also recorded a 7-percent increase in revenue during the period in review to P34.2 billion.

The commercial properties business, meanwhile, reported P3.7-billion revenues in the first three quarters of the year, while operating income from this segment reached P3.3 billion.

SM Prime’s hotels and convention centers business segment booked P1.3 billion in revenues at end-September as it started to cater to a wider market with the easing of quarantine measures in key areas in the Philippines. —DORIS DUMLAO-ABADILLA INQ