SM Prime Q1 net income rose 15% to P7.6 billion

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(Source: Business Mirror | May 7, 2018)

Shopping mall operator SM Prime Holdings Inc. said it posted a 15-percent increase in its net income in the first quarter to P7.6 billion from last year’s P6.6 billion, driven by the expansion of its mall and residential businesses in key cities all over the country.

Consolidated revenues grew 14 percent to P23.4 billion for the period from last year’s P20.5 billion.

“The growing revenue contribution of our mall operations in the provinces and increasing reservation sales of our residential projects in Metro Manila drove our bottom line higher and kept us in line with our first-quarter target in 2018. Nevertheless, we plan to continue expanding in key cities all over the Philippines to sustain our growth targets over the next few years,” SM Prime President Jeffrey Lim said.

Revenues from its shopping malls grew 10 percent during the three months to P13.9 billion from P12.7 billion. Mall revenue accounts for 59 percent of the consolidated revenues of the company as the new malls that opened in 2016 and 2017 helped improve the company’s mall-rental revenues, delivering P11.9 billion, 12 percent higher from last year’s P10.7 billion.

These malls include those in San Jose del Monte in Bulacan, Trece Martires in Cavite, Cherry Congressional in Quezon City and in Antipolo, East Ortigas in Pasig, Cagayan de Oro, S Maison in Pasay, Puerto Princesa in Palawan, Tuguegarao in Cagayan, Pulilan in Bulacan and Lemery in Batangas.

The operating income of SM Prime’s malls increased by 11 percent to P7.8 billion from P7 billion, while operating margin was steady at 56 percent.

The company also maintained its 7-percent same-mall-sales growth for the first three months of the year, it said.

Meanwhile, cinema and event-ticket sales fell by 9 percent to P1.11 billion from P1.23 billion last year. This is due to the less-than-stellar performance of international blockbuster movies shown compared to those shown in 2017.

Other revenues including amusement, bowling, ice-skating and merchandise sales increased by 7 percent to P819 million from P763 million, mainly higher income from amusement rides, improvements in bowling and ice-skating operations and commissions from sale of event tickets.

The company’s expansion in the provinces showed growing contribution to the total revenue of its Philippine mall business to 52 percent as of March from 46 percent in year-end 2017.

SM Prime’s residential group, led by SM Development Corp., posted a revenue growth of 25 percent in the first quarter of 2018 to P7.5 billion from P6 billion in the same period last year. This accounted for 32 percent of the consolidated revenues of the company.

SM Prime said it is on track to reach its target to launch 12,000 to 15,000 residential units this year. These will be spread across the company’s high-rise building, mid-rise building and single-detached house and lot projects.

The company’s other businesses registered a consolidated revenue growth of 8 percent for the period to P2 billion from P1.9 billion in the same period last year.

Revenues from commercial properties group and hotels and convention centers covered 9 percent of the overall consolidated revenues of the company.

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