Posted on April 26, 2011 09:28:03 PM [ BusinessWorld Online ]
SM DEVELOPMENT Corp., the property arm of the Sy-led mall and banking conglomerate, will likely grow profits by as much as a fifth to a record P3.6 billion in 2011 after net income already rose by 45% in the first quarter, officials yesterday said.
SM Development Corp., the firm behind the planned site pictured here, expects profits to grow by 10%-20% this year, officials yesterday said. -- www.smdevelopment.com
The full-year growth projection, which is lower than the P4-billion target that had been set last year, will be supported by five new projects, the officials said.
The projects will be partly bankrolled by an earlier announced fund-raising for P10 billion which should be completed by June, they said.
Such projects which will be launched amid robust demand should allow the company to exceed the P3-billion net income it earned for 2010, Henry C. Sy, Jr., vice-chairman and chief executive of SM Development, said at a press briefing after the company’s annual stockholders’ meeting.
“We are looking at 10%-20% growth. At the rate we are going, we might go higher,” Mr. Sy said.
The property firm will launch five new projects this year: M Place Ortigas, SM Green Residences in Manila, Shell Residences near SM Mall of Asia, Grass Premiere in Quezon City and Mezza 2 in Sta. Mesa.
So far, profits for the first quarter have risen by nearly a half from year-ago levels to P916.3 million after revenues surged, data released by the company yesterday showed.
The figure surpasses the P700-million profit target for the period.
“[This came after] our consolidated revenues grew to P3.4 billion, higher by 70% from last year,” Rosaline Y. Qua, senior vice-president and chief operating officer of SM Development, said at the briefing.
“This is primarily due to bigger sales volume that we experienced during this period,” she added.
The latest profit growth however was slower than that seen in the first quarter of 2010 when net income rose by more than half to P632 million due to new revenue streams from new projects.
Mr. Sy went on to note that the company expects to conclude its earlier announced P10-billion fund-raising within the first half.
Stockholders at yesterday’s meeting agreed to delegate to the board of directors decisions to issue more shares out of the unissued shares of the company “for any future fund-raising activities,” a disclosure filed yesterday showed.
Furthermore, stockholders also approved an increase in authorized capital to P12.4 billion from P8 billion.
“What is lacking in SM Development is liquidity. I want to make it 25% [from the current 16%],” Mr. Sy said, adding that fresh capital will be used for land banking.
Last year, SM Development raised P26.5 billion from corporate notes and stock rights offering.
Shares in SM Development fell by two centavos to close at P9.08 each yesterday. -- N. J. C. Morales
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