earnings reports

Rent relief drags down SM Prime profits by 46% in H1 2020

Ralf Rivas
SM Prime loses P11 billion in waived rent and discounts, which it granted to support businesses operating in its malls

Leading property developer SM Prime Holdings reported a 46% drop in its earnings in the 1st half of 2020, as the coronavirus pandemic forced the company to waive rent for tenants.

SM Prime posted a consolidated net income of P10.4 billion from January to June, lower than the P19.3 billion it earned in the same period last year, according to the company’s disclosure to the Philippine Stock Exchange on Monday, August 3.

“The 1st half of 2020 has been one of the most challenging periods we’ve faced as a company. With the government maintaining the implementation of quarantine protocols in most key areas in the Philippines where our businesses are, SM Prime is committed to sustaining its operations while adhering to the strict safety measures implemented by the government and continue providing convenience to our customers,” said Jeffrey Lim, SM Prime president.

The company registered consolidated revenue of P43.7 billion in the 1st half of the year, 23% lower than the P57 billion in the 1st 6 months of 2019.

Mall rent income dropped to P13.1 billion in the 1st semester, 44% lower than last year’s P23.3 billion, as the Sy-led company granted rental discounts and waivers after quarantine measures took effect mid-March.

As of end-June, waived rent and discounts have amounted to P11 billion.

SM has shifted to online selling through its website and launched drive-in cinemas to help offset losses.

Its residential business arm SM Development Corporation recorded an 11% jump in revenues from P21.4 billion to P23.7 billion.

Meanwhile, its commercial properties business reported a 16% revenue growth to P2.5 billion in the 1st half of the year. The increase was attributed to tenants like business process outsourcing companies continuing operations. – Rappler.com