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SM Prime posts 14% growth in net income to P8.43 B in 9 months

HANS T. SY, Manila Bulletin


SM Prime Holdings, Inc., the country’s top shopping mall developer, reported that its net income grew 14 percent to P8.43 billion in the first nine months of 2013 from the P7.40 billion earned in the same period last year.

In a disclosure to the Philippine Stock Exchange, the firm said its gross revenues in the first nine months expanded 12 percent to P24.77 billion from P22.10 billion in the same period last year.

Rental revenues, which accounted for 85 percent of total revenues, rose 12 percent to P20.94 billion due to rentals from new SM Supermalls opened in 2012 and 2013. Excluding the new malls and expansions, same-store rental growth is at 7 percent

The new malls are SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier and SM Aura Premier, with a total gross floor area of 698,000 square meters.

“We continue to exceed our expectations. We expect to sustain our strong performance as we approach the yearend especially as the Christmas season has been, traditionally, our strongest period,” said SM Prime President Hans T. Sy.

He noted that “our robust performance in the nine months of 2013 is a testament to the strength of consumption driven by the increase in OFW remittances and the continued growth of the BPO industry.”

In terms of gross revenues, SM Prime’s five malls in China contributed P2.17 billion in 2013, or 9 percent of total consolidated revenues, while rental revenues from its China operations contributed 10 percent of consolidated rental revenues.

Gross revenues of the five malls in China increased 14 percent in 2013 largely due to improved mall productivity and lease renewals for the first three malls opened namely SM Xiamen, SM Jinjiang and SM Chengdu. Average occupancy rate for the first three malls is at 93 percent.

SM Prime has 47 Supermalls strategically located in the Philippines with a total gross floor area of about six million square meters (sqm) as well as five Supermalls in China located in the cities of Xiamen, Jinjiang, Chengdu, Suzhou and Chongqing with a total gross floor area of around 0.8 million sqm.

For the rest of 2013, SM Prime is scheduled to launch SM City BF in Paranaque while SM Megamall will be expanded with the opening of Building D. Both projects will be opened to the public in November and December 2013, respectively.

By yearend, SM Prime will have 48 malls in the Philippines and five in China with an estimated combined gross floor area of 7.0 million square meters.

The Securities and Exchange Commission (SEC) approved SM Prime’s merger with SM Land, Inc. (SM Land) on October 10, 2013 and an increase in SM Prime’s authorized capital stock to P40.0 billion from P20.0 billion.

“We are grateful to the SEC for its support of the property merger. Having received this very important approval, we can now move forward and work towards achieving our vision in building an integrated property development company that will rank among the best in the region not only in size but also in the quality and innovativeness of its product offerings,” Sy said.