SM Prime posts B recurring gains in 2017

SM Prime Holdings Inc., the Philippines’ leading integrated property company, registered a 16 percent growth in recurring net to R27.6 billion in 2017 from R23.8 billion in the prior year.

In a disclosure to the Philippine Stock Exchange, the firm said consolidated revenues grew 14 percent to R90.9 billion in 2017 from R79.8 billion in 2016. Overall operating income improved by 15 percent to R40.6 billion in 2017 from R35.3 billion the previous year.

The growth was driven by increase in rental revenue from malls opened and expanded in 2016 and 2017 supported by strong sales take-up of the housing units.

“SM Prime continues to benefit from the sustained overall economic progress of the Philippines that resulted to higher spending power for most Filipino families,” said SM Prime President Jeffrey Lim. He noted that, “this translated to consistent growth of our key businesses that include higher rental revenues of our malls, increased residential units sales and growing contribution of our other business segments.”

SM Prime’s mall revenues grew by 9 percent to R53.2 billion in 2017 from R48.6 billion in 2016 as rent income improved by 11 percent to R45.3 billion from R41.0 billion in the same period under review. The increase in revenue was due to rising contribution of rentals from new and expanded malls that were launched in 2016 and 2017. Meanwhile, same-mall-sales growth was consistent at 7 percent across all mature malls.

Cinema and event ticket sales improved by 2 percent to R4.8 billion in 2017 from R4.7 billion in 2016. Revenues from amusement and merchandise sales also rose by 8 percent to R3.1 billion in 2017 from R2.9 billion in 2016.

Mall operating income improved by 10 percent to R28.4 billion in 2017 from R25.8 billion in 2016, while operating margin was steady at 53 percent.

SM Prime’s residential group posted a revenue growth of 18 percent to R30.0 billion in 2017 from R25.4 billion in 2016. Operating income improved by 24 percent to R8.9 billion from R7.1 billion.

The growth is due to higher construction accomplishments of projects launched in 2013 up to 2016 as well as continued increase in sales take-up of Ready-for-Occupancy (RFO) units.

SMDC’s reservation sales grew by 21 percent in terms of sales value to R57.8 billion in 2017 from R47.7 billion in 2016. In terms of unit sales, it was up by 4 percent to 17,259 from 16,670.

The rest of SM Prime’s businesses registered a revenue growth of 32 percent to R7.9 billion in 2017 from R6.0 billion of the previous year. Operating income increased by 35 percent to R3.6 billion from R2.7 billion.

The Commercial Properties and the Hotels and Convention Centers business segments contributed to a revenue growth of 12 percent and 49 percent, respectively, in 2017. This is attributed to the opening of FiveE-Com Center and Conrad Manila.