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SM Prime profit grows 15% in 1H

Published : Tuesday, August 02, 2011 00:00 [ manilatimes.net ]
Written by : Krista Angela M. Montealegre, Reporter

SM Prime Holdings Inc. reported a double-digit growth in earnings in the first half of the year on the back of new malls, better performance of its China operations, and lower borrowing costs.

In a disclosure to the Philippine Stock Exchange, the country’s biggest mall developer and operator said its consolidated net income grew 15 percent to P2.15 billion in the second quarter from P1.87 billion during the same three-month period in 2010.

This pushed SM Prime’s net income to P4.27 billion in the first semester, up 14 percent from the P3.76 billion in the same period last year.

“For the first half of this year, SM Prime exceeded expectations by continuing to implement its proven business model which focuses on building long-term tenant relationships and effective innovation,” said Hans Sy, SM Prime president.

SM Prime attributed the decreased borrowing costs to the lower interest rates and debt management initiative, which included the prepayment of higher interest-bearing loans through refinancing that also lengthened the maturities of the company’s oblgiations.

Revenues jumped 12 percent to P12.71 billion from P11.31 billion during the first semester of 2010.

Rentals remained the biggest revenue contributor, rising by 15 percent to P10 billion on the strength of a 7-percent growth in same-store sales and the opening of new malls in Tarlac, Laguna and Novaliches last year.

Cinema ticket sales dipped to P1.30 billion in the first half from P1.37 billion last year because of the low turnout of blockbuster movies.

Operating expenses during the first six months of 2011 climbed by 11 percent to P5.92 billion from last year’s P5.32 billion because of higher administrative expenses.

The company’s three malls in China contributed P980 million in terms of gross revenues in the first half, or 8 percent of consolidated revenues. The China operations also contributed P210 million to net income for the six-month period, or 5 percent of total consolidated net income.

Rental revenues of SM China malls advanced by 57 percent to P950 million. Their average occupancy rate stood at 91 percent.

In May, SM Prime opened a 90,261-square meter mall in Masinag, Antipolo.

Later this year, the company is set to open new malls in San Fernando in Pampanga, Olongapo in Zambales, and Suzhou in China. SM Prime is also set to expand two of its existing malls in the Philippines, namely SM City Davao in Southern Mindanao and SM City DasmariƱas in Cavite.

By yearend, SM Prime will have 43 malls in the Philippines and four in China, with an estimated gross floor area of 5.2 million square meters in the Philippines and 0.6 million square meters in China.
SM Prime shares added P0.04 each to close at P11.58 on Monday.
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