Vol. XXII, No. 194 [ BusinessWorld Online ]
Wednesday, May 6, 2009 | MANILA, PHILIPPINES
SY-LED MALL operator SM Prime Holdings, Inc. sustained its growth during the first quarter, buoyed mainly by higher rental fees from newly opened malls.
In a statement yesterday, SM Prime said net income from January to March grew by 7% to P1.7 billion, the same pace during the first quarter of 2008.
Revenues meanwhile jumped by 18% to P4.7 billion last quarter.
"We are very pleased by the resilience that our malls are experiencing despite earlier prognosis of a more challenging economic environment. The SM malls continue to enjoy high foot traffic and healthy sales growth," SM Prime President Hans T. Sy said.
SM Prime said it was hoping that the global economic downturn would have less impact on consumer spending compared to the 1997 Asian financial crisis.
The company said its first quarter results included the operations of three SM malls in China, located in Xiamen, Jinjiang and Chengdu, although the bulk of the business still came from rental fees in Philippine malls.
The China malls were acquired by the publicly listed firm from the Sy family last year.
From January to March, rental fees grew by 19% to P4.1 billion with the three new malls as well as various expansions last year. SM Prime opened SM City Marikina, SM City Rosales in Pangasinan, and SM City Baliwag in Bulacan in 2008
In addition, the company has also expanded The Annex at SM City North Edsa in Quezon City and The Atrium at SM Megamall in Mandaluyong.
SM Prime Holdings said cinema ticket sales during the quarter also improved by 8% due to an increase in the number of local blockbuster movies.
Eunika B. Maloles of 2TradeAsia.com expects the mall operator to sustain growth for the rest of the year even amid an economic slowdown.
"[This] will come mainly from retail demand supported by easing consumer prices and the strong inflow of remittances from overseas workers," she said.
The National Statistics Office reported yesterday that inflation eased to 4.8% in April from 6.4% in March.
Money sent home by overseas Filipino workers went up by nearly 5% in February to $1.32 billion.
That pace was faster than the 0.1% expansion to $1.266 billion recorded last January.
SM Prime opened its 34th mall and its first mall in the Bicol region, SM City Naga in Camarines Sur, in late April.
For the rest of the year, the company plans to open SM City Rosario in Cavite, and SM City Pamplona in Las Piñas. It will also unveil the Sky Garden of SM City North EDSA, and complete the expansion of SM City Rosales in Pangasinan.
By the end of this year, SM Prime expects to have 36 malls in the country, with an estimated gross floor area of 4.9 million square meters. — K.J.R. Liu
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