SM Prime net income up 12% in H1 2021 despite lower mall revenues

Property developer SM Prime Holdings registered a 12% increase in consolidated net income in the first six months of 2021, even as coronavirus restrictions hurt its mall revenues.

SM Prime announced on Monday, August 2, that its consolidated net income rose to P11.6 billion in January-June 2021 from P10.4 billion in the same period in 2020.

In the second quarter alone, its net income more than doubled to P5.2 billion from P2.1 billion a year ago.

"The reported improvement is due to the continued positive performance of the company's residential business...as well as the company's malls business in the second quarter of the year in spite of the effect of the reimplementation of stricter community quarantine from March to May 2021 in key areas such as Metro Manila and nearby provinces," SM Prime said.

Consolidated revenues totaled P41.1 billion in the first half, down 6% from P43.7 billion.

SM Prime's residential business, which accounted for 60% of consolidated revenues, saw a 3% increase in revenues to P24.5 billion from P23.7 billion.

Its unit SM Development Corporation reported 30% growth in net reservation sales to P55.1 billion from P42.4 billion.

SM Prime said construction of residential projects continues with safety protocols in place amid the pandemic.

Its Philippine malls business, which accounted for 26% of consolidated revenues, posted P10.7 billion in revenues. This is lower than the P14.4 billion recorded in January-June 2020, a decrease which SM Prime attributed to "lower mall activities" in the "NCR Plus" bubble of Metro Manila, Bulacan, Rizal, Laguna, and Cavite.

"In these challenging times, we are committed more in providing a safe environment to all our stakeholders by strict observance of health and safety protocols across all our developments," SM Prime president Jeffrey Lim said.

"Along with this commitment is our initiative to support the national government's vaccination program in our malls nationwide as well as providing free inoculation to thousands of our employees."

In contrast, revenues of its China malls business grew 48% to P3 billion from P2 billion as the Chinese economy continued to recover.

SM Prime's other business segments, which include offices as well as hotels and convention centers, contributed P3.1 billion to the company's consolidated revenues.

It added 100 rooms to its hotel portfolio in the first half of 2021 as it opened the south wing of Park Inn by Radisson Clark in Pampanga. – Rappler.com