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SMDC, Belle post higher net income

Posted on April 24, 2013 10:21:34 PM [ BusinessWorld Online ]
By Franz J. G. de la Fuente, Reporter
TWO SY-controlled real estate firms, namely SM Development Corp. (SMDC) and Belle Corp., reported growth in their respective first-quarter net incomes this year versus the year before, with SMDC being driven by higher year-on-year sales revenues, and Belle being fueled by lease income from its casino resort property near Manila Bay.
“SMDC reported that for the first quarter of 2013, consolidated net income amounted to P1.4 billion, up 12% year-on-year due to an improved gross profit margin and increased economies of scale. Net margin improved to 23% from 22% during the same period last year,” SMDC said in a disclosure yesterday, adding that revenues also increased by 4% to P5.9 billion versus 2011 levels.
SMDC’s latest financial statement was not immediately available, however.
In a briefing following the company’s annual stockholders’ meeting in SMX Convention Center, Pasay City, Jeffrey C. Lim, SMDC’s newly elected president and chief operating officer, said that the developer has allotted P71 billion up to 2015 for its capital expenditures. “Over the next three years, SMDC will spend about P71 billion to drive its expansion activities,” he said, noting in a separate interview that P20 billion will be spent this year, P26 billion next year, and P25 billion in 2015.
“If ever we’ll do fund raising this year, it will be in the second half,” Mr. Lim added.
This year, SMDC aims to launch at least four new projects in Metro Manila and three expansion buildings of ongoing projects.
“These are Trees Residences and Grass Residences Phase 2 in Quezon City; Shore Residences at the Mall of Asia Complex; and possibly Rich Residences in Mandaluyong. In addition, expansion towers at Wind Residences, Field Residences, and Grace Residences will also be launched.
These new and expansion projects will add about 13,300 units of new inventory,” SMDC said in its disclosure.
This additional unit inventory is higher than the 12,614 units that the firm sold last year.
The company also announced yesterday that it will tap pop singer Sarah Geronimo to be its new endorser, joining current endorser Anne Curtis.
“For this year we will have two brand ambassadors, the two most popular women in the country today. By the end of May, we will be launching Sarah Geronimo as our new ambassador,” Nita Claravall, SMDC senior vice-president for Marketing, said at the same briefing.
LEASE REVENUES
Meanwhile, Belle realized a net income of P777.74 million for the period ended March, almost 15 times higher from the P52.46 million last year, largely due to “receipt of revenues from the lease agreements with Melco Crown,” the casino developer said in its first quarter financial report.
At present, Belle is currently devoting “significant resources” for the mid-2014 completion of Belle Grande, a planned integrated resort and casino project which will rise on a 6.2-hectare site within the state-run Entertainment City near Manila Bay which will be operated by Melco Crown.
Belle, an affiliate of Sy-led SM Investments Corp., also generated revenues -- mostly from the termination fee income and sale of real estate and club shares -- of P1.18 billion, which is 1,117.25% higher than last year’s P96.94 million.
Cost of real estate and club shares sold expanded by 22.50% to P42.74 million from P34.89 million due to “higher unit sales of real estate and club shares in 2013.” General and administrative expenses rose by 34.49% to P75.57 million versus P56.19 million. Shares of SMDC gained two centavos or 0.22% to P8.94 apiece yesterday from P8.92 last Tuesday, while those of Belle gained 14 centavos or 2.05% to P6.98 each yesterday from P6.84 last Tuesday.
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