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New malls, condo sales boost SM Prime Holdings’ profit

Posted on February 23, 2015 10:10:00 PM [ BusinessWorld Online ]
By Daphne J. Magturo, Reporter
 
SM PRIME Holdings, Inc. yesterday said its 2014 net income grew by 13% -- within the range of analysts’ estimates -- on the back of a double-digit growth in revenues.
In a statement, SM Prime said bottom line last year reached P18.4 billion last year, while revenue went up by 11% to P66.2 billion.

SM Prime President Hans T. Sy said in the statement: “We expect this performance to be surpassed this year as the company pursues its 2015 expansion plans.”

He was referring to four new malls to be opened this year, as well as the completion of FiveE-comCenter and the launch of five new housing projects.

“This is in line with our target,” Alexander Adrian O. Tiu, analyst at AB Capital Securities, Inc., said in a phone interview. He noted, however, that the results “slightly missed” the 13.6% market consensus from a Bloomberg poll.

Shares in SM Prime shed 28 centavos or 1.42% to close at P19.40 each yesterday.

The company’s rental revenues from retail and commercial spaces increased by 13% to P36.5 billion in 2014, the company said in the statement.

“Management attributed the increase in rental revenue mostly to the new malls that opened and the expansion of existing malls in 2013 and 2014, namely, SM Aura Premier in Taguig, SM City BF Parañaque, Mega Fashion Hall in SM Megamall in Mandaluyong, SM City Cauayan in Isabela province and SM Center Angono in Rizal province, which have a combined total gross floor area of 564,000 square meters,” SM Prime said.

The company’s housing group, which accounted for 33% of consolidated revenues, “continued to show improvements.”

The group recorded a 7% increase in real estate sales to P22.2 billion, “mainly driven by the increase in the pace of construction of sold units” in its condominium developments in Taguig, Pasay, Manila and Quezon City.

The malls’ cinemas grew their ticket sales by 14% to P4.3 billion.

“The increase was driven by the opening of additional digital cinemas in the new malls and expanded malls and by the launch of international and local blockbuster movies,” SM Prime said.

Together with amusements, cinemas account for 12% of SM Prime’s consolidated revenue for 2014.
                                                                                                                                        
The property developer’s consolidated costs and expenses increased by 8% to P38.6 billion last year.
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