Lack of one-time gain drags SM Prime’s 2016 profit

MANILA, Philippines – The net income of listed property firm SM Prime Holdings Incorporated (SMPHI) fell in 2016 amid the lack of a one-time gain, dragging its profit by 15.90% despite its continuous mall expansion and strong sales from its residential business.

In a regulatory filing to the Philippine Stock Exchange (PSE), SMPHI said its bottomline stood at P23.8 billion for 2016, compared to 2015’s P28.3 billion which included a P7.4-billion one-time trading gain.

Excluding the one-time gain, the Sy-led integrated property firm saw its net income up by 14% to P23.8 billion in 2016.

SMPHI told the local bourse that its 2016 consolidated revenues grew by 12% to P79.8 billion, from the P71.5 billion recorded in 2015. 

Its overall operating income improved by 12% to P35.3 billion in 2016, from P31.4 billion in 2015.

“SM Prime sustained its overall performance in 2016 on the account of focusing more on recurring income stream complemented by the solid performance of the housing group,” SMPHI president Jeffrey Lim said in the disclosure.

“SM Prime is well-positioned to capture the positive impact of the higher infrastructure spending intended by the government that will also spur overall economic growth of the country,” he added.

Mall revenues grew by 9% to P48.6 billion in 2016, from the P44.5 billion in 2015.

SMPHI said 1.5 million square meters (sqm) of mall leasable space were added to its portfolio over the past two years.

Same-mall-sales growth was also consistent at 7%, while cinema and event ticket sales were slightly down by 3% to P4.7 billion in 2016.

“The decline was due to fewer local blockbuster movies shown in 2016 compared with 2015,” SMPHI said.

More malls

SM Prime currently has 60 shopping malls in the Philippines, with 7.7 million sqm of gross floor area (GFA). It also has 7 in China, with 1.3 million sqm of GFA.

For 2017, it will open at least 4 new malls in the Philippines, with an estimated combined 300,000 sqm of additional shopping space.

SMPHI’s residential group led by SM Development Corporation contributed 32% to the company’s consolidated revenues in 2016 and grew by 13% to P25.4 billion in the same year. (READ: Top property, gaming firms interested in New Nayong Pilipino PPP)

Its residential group’s operating income surged by 17% to P7.1 billion last year, from P6.1 billion in 2015 on higher sales take-up on ready for occupancy (RFO) units from various projects.

As of end-2016, the group’s RFO inventory amounted to 2,374 units, down 34% from 3,617 units in 2015.

Consolidated costs of real estate increased by 9% to P13.1 billion from P12 billion, which led to an improved gross profit margin of 48%. Its net income margin improved to 23%.

Reservation sales grew by 18% in terms of sales value to P46.7 billion in 2016, from P39.4 billion in 2015.

For 2017, SMPHI is set to launch 15,000 to 18,000 residential units, including high-rise, mid-rise, and horizontal house and lot developments.

SMPHI’s commercial properties group as well as hotels and convention centers both recorded a 32% increase in revenues to P2.7 billion and P2.4 billion, respectively.

As of end-2016, the commercial properties group has 6 office buildings with an estimated GFA of 371,000 sqm. – Rappler.com