SM Prime Holdings Inc., operator of a chain of eponymous shopping malls, said its income grew 14 percent during the first half of the year to P14.39 billion, from P12.59 billion in the same period last year.
Income for the second quarter alone grew 15 percent to P7.79 billion, from last year’s P6.75 billion.
Consolidated revenues grew by 10 percent to P43.25 billion during January-to-June period, from P39.23 billion last year.
“SM Prime’s performance in the first half of the year reflects a more balanced revenue and income streams from our various businesses, including the growing contribution from our provincial operations,” SM Prime President Jeffrey C. Lim said in a statement. “We are happy to report that our investments in the provinces are now bearing fruits, particularly in mall operations given that these account for more than half of our Philippine malls portfolio.”
Lim added the country’s top property developer expects a growing contribution “in the coming years… from our residential group as we are launching more housing projects across the country”.
Mall revenues, which contributed 60 percent of SM Prime’s consolidated revenues, rose by 10 percent in the first half of the year to P25.68 billion, from P23.42 billion last year.
Mall rentals improved by 10 percent to P21.75 billion, from P19.79 billion, driven by additional 1.1 million square meters gross floor area (GFA) of retail spaces from new malls and expansions in 2015 to 2017, as well as 7-percent same-mall-sales growth.
Cinema- and event-ticket sales were flat at P2.35 billion due to fewer blockbuster movies, SM Prime said. On the other hand, revenues from amusement and merchandise sales amounted to P1.58 billion, up by 26 percent.
Consolidated mall-operating income increased by 10 percent to P14.18 billion, from P12.90 billion, while operating margins were stable at 55 percent in the period under review.
To date SM Prime has 63 shopping malls in the Philippines and seven in China with a GFA of 7.8 million sq m and 1.3 million sq m, respectively. The company is scheduled to open new malls, including SM City Puerto Princesa in Palawan.
Residential group, which accounts for 32 percent of SM Prime’s consolidated revenues, recorded a 5-percent increase in revenues to P13.91 billion, from P13.25 billion last year. Revenue growth came from higher construction accomplishments of SM Development Corp. projects launched since 2014.
The rest of SM Prime’s businesses posted a revenue growth of 43 percent to P3.74 billion for the period, from P2.61 billion last year.
Operating income increased by 49 percent to P1.77 billion, from P1.19 billion, while operating-income margin improved by 47 percent, from 45 percent last year.
The growth was attributed to the rental revenues from Five E-com Center, launched in 2015, and Conrad Hotel Manila, which opened in June last year.
Currently, SM Prime has six office buildings with a combined GFA of 383,000 sq m. Three E-Com and Four E-Com Centers are under construction and scheduled for completion in 2018 and 2020, respectively. These additional office buildings will add an estimated GFA of 320,000 sq m in the company’s office portfolio. Its Hotel and Convention Centers group has a portfolio of six hotels with over 1,500 rooms, four convention centers and three trade halls.