Friday, August 7, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
BY KRISTINE JANE R. LIU, Reporter
PROFITS OF the mall and residential arms of the SM Group grew at the faster rate during the second quarter as customers continue to flock the Sy-led group’s products and services.
In an interview, SM Development Corp. Vice-President Jose T. Gabionza said profits from April to June stood at P592.6 million which Mr. Gabionza said is "significantly higher than last year’s second-quarter profits" and up from last quarter’s P419 million.
This brings net income to a record high performance of P1 billion for the first half, up from the P10.3 million it posted in the same period last year.
Revenues, meanwhile, grew by 85% to P2.6 billion from January to June, the biggest contribution of which came from its real estate whose profits expanded by 104% to P776 million.
"Overall the industry is really buoyant. Maybe this is because some of the overseas Filipinos are putting their money in this sector since paper assets are a bit volatile," Mr. Gabionza said, adding however that majority of their customers are still the locals.
Mr. Gabionza said they are looking at a double-digit growth this year with their core business fueling mostly the gains. "But we still have to look at it with cautious optimism since we do not know what will happen," he said.
For the first half, SM Development has pre-sold 1,771 units valued at P4.1 billion, up by almost a third. The company currently has seven ongoing projects and plans to launch five more before the year closes.
Among its ongoing projects include Chateau Elysee, a six-cluster mid-rise condominium project in Parañaque City; Berkeley Residences in Katipunan Road; Grass Residences beside SM City North EDSA; Sea Residences in Pasay City; Field Residences in Sucat, Parañaque; and residential subdivisions Lindenwood Residences and Mezza Residences which are located in Muntinlupa and Sta. Mesa, Manila, respectively.
Other projects scheduled to be launched in the second half include Princeton Residences and Sun Residences in Quezon City; Mars Residences in Makati City; Jazz Residences in Mandaluyong City; Tree Residences in Cainta, Rizal; and Wind Residences in Tagaytay City.
Likewise, the April to June net income of SM Prime Holdings, Inc. climbed by 8% to P1.7 billion, while revenues during the quarter reached P5 billion, a 14% increase year-on-year. This brought first-half profits to P3.4 billion from P3.2 billion in the same period last year.
SM Prime Holdings said the biggest contributor to its net income came from its rental revenues because of the new malls they opened, namely SM City Marikina, SM City Rosales, and SM City Baliwag, which they opened last year, and SM City Naga which they opened earlier this year.
Cinema ticket sales also went up by 5% to P93 million from January to June "due to an increase in the number of blockbuster movies shown this year," among which include Transformers 2, and Angels & Demons.
"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," SM Prime President Hans T. Sy said.
Following the opening of SM City Naga, SM Prime will be opening later this year SM City Rosario in Cavite, and SM Supercenter Pamplona in Las Piñas. By yearend, the country’s largest mall operator will have 36 malls nationwide that have an estimated gross floor area of 4.9 million square meters.
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