SM residential arm posts higher revenue

SM Development Corp. (SMDC), the residential arm of property grant SM Prime Holdings Inc., raked in P11.4 billion in revenue in the first quarter of the year, higher by 23 percent from the same period last year.

SMDC accounts for 44 percent of SM Prime’s consolidated revenues.

SM Prime president Jeffrey Lim said the residential segment has shown strong growth in the first three months, abating the effect of revenue losses in the mall segment.

“The balance between our recurring and developmental income streams sustains our healthy financial position during this pandemic,” Lim said.

SM Prime reported that with 16,000 housing units available, equivalent to 12 months of sale, it has enough supply to cushion the effect of construction delays in the residential projects due to the Luzon-wide enhanced community quarantine.

In terms of net income, SM Prime recorded a consolidated net income of P8.3 billion in the first quarter, down five percent, while its consolidated revenue in the same period declined three percent to P25.8 billion.

SM Prime’s strategic development of integrated properties proved to be resilient as this allowed the company to cope with the crisis. With low gearing and strong residential market, the company is able to maintain strong financial position that enables it to weather the adverse economic effects of COVID-19, Lim said.

He said despite limited revenue – as it waived P8.8 billion in mall rent from March 16 to May 15 – SM Prime has sufficient cash flow to support necessary operating expenses.

Moreover, SM Group, through SM Foundation, has donated a total of P270 million since the implementation of quarantine. It also turned over emergency quarantine facilities in Metro Manila to help the government respond to the virus outbreak.