Mall operations continue to drive SM Prime's net income
MANILA, Philippines – Mall operations remained the top contributor to SM Prime Holdings Incorporated's net income, which increased by 15% to P7.79 billion during the 2nd quarter of the year.
This is compared to the P6.75 billion registered in the same period in 2016. (READ: FAST FACTS: SM Investments Corporation)
This brought the bottomline of the country's leading integrated property developer to P14.39 billion in the 1st half of 2017, 14% higher from P12.59 billion in the same period last year.
"SM Prime's performance in the 1st half of the year reflects a more balanced revenue and income streams from our various businesses including the growing contribution from our provincial operations," SM Prime president Jeffrey Lim told the Philippine Stock Exchange (PSE).
Data from SM Prime's latest financial disclosure showed that its mall operations contributed 60% to its total revenues. Consolidated revenues from SM Prime's mall operations increased by 10% to P25.68 billion in the 1st half of 2017, from P23.42 billion last year.
The additional 1.1 million square meters (sqm) gross floor area (GFA) of retail space from new malls as well as expansions between 2015 and 2017 drove SM Prime's mall rentals, of which revenues improved by 10% to P21.75 billion in the 1st half of 2017.
"We are happy to report that our investments in the provinces are now bearing fruit, particularly in mall operations given that these account for more than half of our Philippine malls portfolio," Lim said.
SM Prime currently has 63 shopping malls in the Philippines and 7 in China with a GFA of 7.8 million sqm and 1.3 million sqm, respectively.
SM Prime's residential unit accounted for 32% of the group's consolidated revenues during the 1st half of 2017. The unit's revenues increased by 5% to P13.91 billion from P13.25 billion in the same period in 2016. (READ: Doing business under Duterte? Philippines' richest family shows how)
Revenue growth came from higher construction accomplishments of SM Development Corporation (SMDC) projects launched since 2014. These are Shore 2 Residences in Pasay City, Air Residences in Makati City, Cool Residences in Tagaytay City, Fame Residences in Mandaluyong City, Trees Residences in Quezon City, and South Residences in Las Piñas City.
Reservation sales for the 1st half of the year stood at P27.55 billion, up 22% from a year ago.
"In the coming years, we are expecting a growing contribution from our residential group as we are launching more housing projects across the country," Lim said.
The rest of SM Prime's businesses posted a revenue growth of 43% to P3.74 billion in the 1st half of the year, from P2.61 billion last year.
SM Prime has 6 office buildings with a combined GFA of 383,000 sqm.
Two E-Com Centers in Pasay City are under construction and scheduled for completion in 2018 and 2020.
Shares of SM Prime were unchanged on Monday, August 7, closing at P34 each. – Rappler.com