SM Prime to issue up to P20B retail bonds


(Source: Manila Bulletin, by James Loyola | September 18, 2015)

SM Prime Holdings, Inc. (SMPH), one of southeast Asia’s largest property developers, is raising up to P20 billion from the issuance of Fixed Rate Peso Retail Bonds with maturities of 5.25 years and 10 years.

In a disclosure to the Philippine Stock Exchange, SM Prime said its board of directors has approved the issuance of up to P15 billion worth of bonds with an over subscription option of up to P5 billion.

“The Board of Directors also authorized the management to negotiate and finalize the terms and conditions, including pricing, tenor and any increase in issuance amount, and execute any and all documents necessary, to implement the retail bond issue,” the firm said.

SM Prime registered a 90 percent surge in consolidated net income to P18.7 billion in the first half of 2015 from P9.8 billion in the same period last year.

The firm said earnings included one–time trading gains on the sale of marketable securities. Excluding these gains, the company’s recurring income grew by 15 percent year-on-year to P11.2 billion.

Consolidated revenues grew by 8 percent to P35.9 billion from P33.3 billion in the first six months of 2015, mainly driven by the continued growth in rental revenues as well as higher revenue recognition on completed projects of its real estate business.

“The strong financial performance posted by SM Prime in the first half of the year is reflective of the benefits derived from a diversified property portfolio as both rental and developmental incomes contributed to the overall performance of the company,” said SM Prime president Hans T. Sy.

He added that “the sustained growth could be attributed to the consolidation of SM Prime, which resulted to a strong balance sheet that allowed us to pursue all projects as planned. We are confident that we can sustain this growth in the long-term.”

Rental revenues from retail and commercial spaces, accounted for 54.2 percent of the consolidated revenues, recording a 10 percent gain to P19.4 billion from P17.7 billion in the first half 2015.

SM Prime’s real estate sales which contributed 34.2 percent to consolidated revenues, was up by 3 percent to P12.3 billion from P11.9 billion in the same period last year. This allowed the group to post an 8 percent increase in net income to P3.0 billion.