By Zinnia B. Dela Peña (The Philippine Star) Updated August 08, 2009 12:00 AM
MANILA, Philippines - Bucking a global slowdown, shopping mall giant SM Prime Holdings Inc. reported an eight percent increase in its net income during the first half of the year as rental revenues increased with the addition of four new shopping centers.
SM Prime, a unit of conglomerate SM Investments Corp. owned by the family of retail tycoon Henry Sy, posted a net profit of P3.4 billion in the six months to June this year as consolidated revenues went up 15 percent to P9.6 billion.
Lease revenues accounted for the biggest chunk of total revenues, contributing P8.4 billion or an increase of 17 percent from the previous level of P7.2 billion.
“We are pleased to have met our targets for the first half of this year in spite of the ongoing global financial crisis. Our results reinforce our belief in the resilience of the Philippine economy. We remain steadfast in pursuing our growth and expansion programs in order to better serve our millions of loyal customers,” SM Prime president Hans T. Sy said.
In the second quarter, SM Prime posted a net profit of P1.7 billion, up eight percent, as revenues expanded 14 percent to P5 billion.
“The growth resulted from an active retail environment defying weak market expectations amid an ongoing global recession,” Sy added.
Last year, SM Prime opened SM City Marikina, SM City Rosales and SM City Baliwag. So far this year, the company has opened one mall (SM Naga). All these added 477,000 square meters to the company’s total gross floor area and currently register an average occupancy rate of 96 percent.
SM Prime’s three malls in China contributed P500 million and P60 million in terms of revenues and net income, respectively. Among their major tenants include US retail giant Wal-Mart, SM-Laiya Department Store, apparel retailer Giordano, health and beauty store chain Watsons, and international quick service restaurants McDonald’s and KFC.
Also, given the increase in the number of blockbuster movies shown this year, cinema ticket sales during the period rose five percent to P930 milion.
Operating expenses, meanwhile, grew 20 percent to P4.5 billion from P3.8 billion due largely to the new malls opened. Income from operations increased 12 percent to P5.1 billion.
SM Prime is opening two more malls for the remainder of the year – SM City Rosario in Cavite and SM Supercenter Pamplona in Las Piñas – to end the year with a total of 36 malls nationwide.