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SM Prime sees faster growth in H2

By Neil Jerome C. Morales (The Philippine Star) Updated October 01, 2012 12:00 AM

MANILA, Philippines - SM Prime Holdings Inc., the country’s largest mall developer, said it expects to post faster growth in the second half compared with the first semester.

Robust economic growth backed by consumer spending and efficient operations will result in a better second half, the company’s top executives said.

“I am very confident we are hitting all our targets. I am now working towards going beyond our targets,” SM Prime president Hans Sy said in a chance interview.

“It is very encouraging. One thing is for the operation, we are very much in control of how we want things done,” he said.

In the first six months of 2012, SM Prime posted P4.92 billion in net income, up 15 percent compared with P4.27 billion in the same period last year.

Revenues also climbed 15 percent to P14.57 billion on the back of the uptick in same-store sales, new store openings and the improved performance of the group’s malls in China.

“I think the economy and consumer spending continues to improve,” said Jeffrey Lim, executive vice-president and chief finance officer of SM Prime.

He said the economic resiliency amid global woes will drive the continuous growth for SM Prime.

The Philippine economy grew 6.1 percent in the first half, slightly faster than the government’s five- to six-percent target for the year.

To sustain the growth pace, the mall developer allotted P63 billion in capital expenditures for the next three years.

Lim said this will allow SM Prime to develop three to five malls per year.

SM Prime is keeping its options open in funding the average of P21-billion spending in the next three years.

“We have to see how the market goes and will just wait for next year,” Lim said.

The company might take advantage of the low interest rate environment and market liquidity to secure funds, Lim said.

On Friday, the company opened SM Lanang Premier in Davao, its 46th mall in the country, bringing the firm’s total combined gross floor area to 5.5 million square meters.

It is the fifth SM mall to be opened this year after SM City Olongapo in Zambales, SM City Consolacion in Cebu, SM City San Fernando in Pampanga and SM City Gen. Santos in South Cotabato.

For the rest of 2012, SM Prime, the mall developer of retail and banking tycoon Henry Sy, is slated to open SM Chongqing in China.
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