SM sustains growth by building more malls
MANILA, Philippines – SM Prime Holdings saw its net income surge by 70% to P22.9 billion ($488.19 million) in the first 9 months of 2015 .
SM Prime President Hans Sy said that the company is expecting to sustain its growth through continuously increasing its mall footprint by 13% this year.
On October 23, SM opened its 55th mall, and its first in Caloocan City. (READ: SM opens first mall in Caloocan City)
“We are excited to launch SM Seaside Cebu later this year, a landmark project in the Visayas region. We see Metro Cebu as one of our important growth corridors following our growth track in Metro Manila,” he added.
By the end of 2015, SM Prime will have 56 malls in the Philippines and 6 malls in China, with an estimated combined gross floor area of 8.3 million square meters.
On the residential development, SM Prime plans to launch about 12,000 to 15,000 units this year, as the company’s commercial properties group is set to launch Five E-com Center this month. Three E-Com Center is under construction and is scheduled for opening in 2018.
For hotels and convention centers, Park Inn by Radisson Clark in Pampanga is expected to open in December 2015, while Conrad Manila in the Mall of Asia Complex in Pasay City is expected to open by the first half of 2016.
Rental revenues, real estate sales
SM Prime's growth was boosted by P7.4 billion ($157.84 million) one-time trading gain on marketable securities booked in the first quarter of the year. On a recurring basis, net income increased by 15% to P15.5 billion ($330.49 million) in the same period.
In a disclosure to the stock exchange Monday, November 2, SM Prime said the 9-month consolidated revenues went up by 9% to P52.2 billion ($1.11 million) during the period.
For the 3rd quarter alone, recurring income grew 15% to P4.2 billion ($89.58 million) while revenues climbed 13% to P16.2 billion ($345.51 million).
The growth in rental revenues was mainly driven by rising contribution from the new malls and the expansion of shopping spaces in existing malls in 2013 and 2014, SM Prime said.
Rental revenues from retail and commercial spaces, which accounted for 56% of the consolidated revenues, increased by 11% to P29.4 billion ($627.13 million) from P26.4 billion ($563.14 million) in the first 9 months of 2014.
SM Prime’s real estate sales, which accounts for 32% of the consolidated revenues, grew by 4% to P16.6 billion ($353.88 million) from P16 billion ($341.09 million) in the same period in 2014
The improvement in real estate sales was largely attributed to the increase in the sales take-up and higher construction accomplishment of SM Development Corporation (SMDC) projects launched in 2010 to 2013.
Reservation sales was up by 19% year-on-year to 10,297 units in the first 9 months of 2015, reflecting a 22% increase in value worth P28.4 billion ($605.90 million) from P23.3 billion ($496.92 million) in the same period last year.
SMDC alone posted a 23% increase in net income P3.8 billion during the nine-month period from P3.1 billion in 2014. – Rappler.com
US$1 = P46.89
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