SM Prime recurring profit up 16%
NEW MALLS and sales of residential properties continued to drive SM Prime Holdings, Inc.’s earnings higher in 2017.
In a statement issued Monday, SM Prime said recurring profit grew 16% to P27.6 billion, after a 14% increase in consolidated revenues to P90.9 billion. The company attributed the growth to higher rental revenues from malls opened in the last two years, alongside the solid sales take-up of residential units in 2017.
Overall operating income, meanwhile, went up 15% to P40.6 billion in 2017, against the P35.3 billion posted in the previous year.
“SM Prime continues to benefit from the sustained overall economic progress of the Philippines that resulted to higher spending power for most Filipino families. 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 President Jeffrey C. Lim said in a statement.
SM Prime operates in four business units, namely malls, residential, commercial, and hotels and convention centers.
Revenues from mall operations were up 9% to P53.2 billion, while rental income gained 11% to P45.3 billion. This was fueled by rising contributions from new malls, specifically SM City San Jose del Monte, SM City Trece Martires, SM City East Ortigas, SM CDO Downtown Premier, SMaison at Conrad Manila, SM City Puerto Princesa, and SM Center Tuguegarao Downtown.
SM Prime said same-mall sales growth, or sales derived from malls that have been open for more than a year, was consistent at 7% across all mature malls.
By the end of 2017, SM Prime had a total of 67 malls covering a gross floor area (GFA) of 8 million square meters (sq.m.) in the Philippines, and seven malls in China with a GFA of 1.3 million sq. m. Operating margins from these malls stood at 53%.
On the other hand, the residential business under SM Development Corp. (SMDC) saw revenues climb by 18% to P30 billion for the year. Operating income also increased 24% to P8.9 billion for the period. This was attributed to construction accomplishments from projects launched from 2013 to 2016, including Shore Residences and Shore 2 Residences in Pasay City, Air Residences in Makati City, and Fame Residences in Mandaluyong City.
The same projects allowed SMDC to post a 4% increase in the number of units sold for the year, to 17,259 units from 16,670 in 2016. Reservation sales further rose 21% to P57.8 billion for the period.
Meanwhile, revenues from commercial properties grew by 12% after SM Prime opened FiveE- Com Center. Hotels and convention centers’ top- line added 49% with the opening of Conrad Manila, pushing the two segments to a combined growth of 32% to P7.9 billion in terms of revenues. Operating income from commercial and hotels and convention centers also surged 35% to P3.6 billion.
SM Prime is expanding its office space inventory at the Mall of Asia Complex in Pasay City, adding a combined GFA of 320,000 sq.m. from the opening of ThreeE-Com and FourE-Com Centers in 2018 and 2020, respectively.
The hotels and convention centers arm, meanwhile, has six hotels with more than 1,500 rooms, four convention centers, and three trade halls under its portfolio.
Shares in SM Prime gained 15 centavos or 0.42% to close at P36.25 apiece at the stock exchange on Monday.