Mall developer and operator SM Prime Holdings, Inc. is confident of meeting its income target for the year due to a better-than-expected performance in the second quarter and the traditional uptick in consumer spending during the holiday season.
In an interview, SM Prime’s Assistant Vice-President for Finance Teresa Cecilia Reyes said the company was on track to meet its 8% to 10% growth target for the year as its consolidated net income went up by more than a tenth to P1.6 billion.
This brought the Sy-led firm’s first-half consolidated net income to P3.2 billion, 10% higher than a year earlier, SM Prime told the stock exchange on Friday.
Rental revenues again contributed the biggest share in SM Prime consolidated revenues, growing by 11% to P7.2 billion. The realty firm traced the growth to retail sales, the opening of three malls and the expansion of three more in 2007.
The SM malls, which opened last year in Bacolod, Taytay and Muntinlupa, now have an average occupancy rate of 94%, the company said.
But this year’s 5% growth in rental revenues was slower than last year’s 7% indicating reduced consumer spending, Ms. Reyes said.
On Tuesday, Philippine Retailers Association Vice-President Paul Santos said prospects for the second half remained bleak as consumers limit spending to basic goods.
Ms. Reyes expects depressed consumer sentiment to continue throughout the year, but is hopeful that Filipinos will spend more in the second half, when people shop for the holidays and dollar remittances from Filipinos abroad start to come in.
Ms. Reyes said SM Prime’s China malls continued to post strong results, contributing P370 million to consolidated revenues. SM Prime has three malls in Xiamen, Jinjiang and Chengdu.
A MasterCard survey on retail growth and expenditure among 12 Asia-Pacific countries projected China to spend 5.56 billion yuan on retail products in the second half.
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