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SMDC optimistic on achieving P4.3-B net profit goal in 2011

By JAMES A. LOYOLA
August 6, 2011, 2:42am [ mb.com.ph ]

MANILA, Philippines — Residential developer SM Development Corporation (SMDC) is confident of hitting its net income target of P4.3 billion for this year, a 44 percent growth over earnings in 2010.

In a press briefing, SMDC president Rose Qua said the firm is also bullish about hitting P24 billion in sales which will allow them to hit their income target for this year.

She noted that sales booked in July 2011 alone reached slightly over P3 billion compared to the P10.7 billion pre-sold in the first half of the year.

To further widen its market reach, SMDC said it will launch six new projects this year in the cities of Pasig, Quezon, Pasay, Manila, and Parañaque.

Qua said these will include Green Residences, Shell Residences (across Sea Residences in the Mall of Asia complex) and the second phase of Grass Residences (near SM North EDSA).

She added that they are optimismic about achieving the firm’s objectives for the year as more overseas Filipino workers come back home with more cash to spend.

Meanwhile, SM Prime and SM Investments Corporation chief finance officer Jose Sio said ‘the SM group should have a controlling interest since, aside from the financial aspect, investors also look at the management of the company.”

He noted that they should control the company since SM always has control over all of its major subsidiaries.

Since SM Prime is no longer issuing REITs, Lim said they have resorted to borrowing money to fund its capital expenditures, mainly for landbanking and the construction of more malls in the Philippines and China SM Prime raised P6.55 billion ($150 million) from an equity placement late last year to fund its mall chain expansion. The equity placement comprised 569.61 million common shares with the placement price set at P11.50 per share.

The firm said the stock sale followed a successful overnight bookbuilding process which saw strong interest from high quality institutional investors in Asia, Europe, and the United States.

SMDC reported a robust 54 percent growth in its consolidated net income to P1.93 billion for the first half of 2011 from the P1.25 billion realized during the same period last year.

Consolidated revenues increased by a hefty 65 percent to P7.14 billion as compared to P4.33 billion from January to June 2010. SMDC’s revenues from its real estate operations surged even higher by 67 percent to P6.86 billion from P4.11 billion in the first semester of 2010.

The firm said it sustained its high-growth earnings performance on account of its strong sales record and the increased momentum in the construction of its various projects in Metro Manila, and Tagaytay City.

Its pre-sales activity remained robust in the first half as SMDC pre-sold 4,936 residential units worth approximately P10.7 billion as the company continues to introduce innovative ways of marketing its products.

“The highly favorable results of SMDC reflect the success of the business model that we have developed within the group. We have set a course that serves the immediate needs of a growing market that was long unnoticed and unserved by the industry,” said SMDC vice chairman Henry Sy, Jr.
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