SM Prime profit builds up 15% to P7.6 B

SM Prime Holdings Inc. reported a 15 percent increase in its first quarter net income to P7.6 billion due to the continued expansion of its mall and residential businesses.

The company registered P23.4 billion in consolidated revenues, up 14 percent year-on-year.

SM Prime president Jeffrey Lim said the growing revenue contribution of mall operations in the provinces and increasing reservation sales of residential projects in Metro Manila drove the company’s bottomline higher and kept it in line with the first quarter target.

“Nevertheless, we plan to continue expanding in key cities all over the Philippines to sustain our growth targets over the next few years,” Lim said.

SM Prime’s overall operating income expanded by 16 percent to P11.1 billion.

Among the different business segments, the mall business recorded a 10 percent growth in revenue to P13.9 billion or 59 percent of the total.

Operating income increased by 11 percent to P7.8 billion, while operating margin was steady at 56 percent.

The company also maintained its seven percent same-mall-sales growth for the first quarter.

For the residential business, SM Development Corp. posted a revenue growth of 25 percent to P7.5 billion or 32 percent of the consolidated revenues. Operating income surged 43 percent to P2.4 billion.

Real estate sales remain strong due to more projects being turned over from 2015 to 2017. These include Shore 2 Residences and S Residences in Pasay City, Fame Residences in Mandaluyong City, South Residences in Las Piñas City, and Spring Residences in Parañaque City.

Sales of ready-for-occupancy (RFO) projects continue to increase due to strong demand fueled by overseas Filipino workers’ families, international buyers and rising disposable income of the emerging middle class.

The company is on track to launch 12,000 to 15,000 residential units this year, comprising of high-rise-building, midrise-building and single-detached house and lot projects.

SM Prime’s other businesses, meanwhile, registered a consolidated revenue growth of eight percent to P2 billion.

Revenues from the Commercial Properties Group and hotels and convention centers covered nine percent of the overall consolidated revenues of the company.

The company is set to launch ThreeECom this year, its third office building in the Mall of Asia Complex with almost 130,000 sqm of gross floor area.

The hotels and convention centers business has six hotels with over 1,500 rooms, four convention centers and three trade halls. The group is set to expand Park Inn – Clark in Pampanga this year.