Corporate News

By Keith Richard D. Mariano, Reporter

SM Prime’s target of doubled earnings seen within reach

Posted on June 28, 2016

SM PRIME Holdings, Inc. said its expansion plans remain “on track” with a target to double its earnings by 2018 within reach, its top executive said.

SM City San Jose del Monte in Bulacan -- WWW.SMINVESTMENTS.COM
The company is “very much on track” to hit its net profit target of P32 billion over the next three years, President Hans T. Sy told reporters in a June 16 interview.

SM Prime earmarked P220 billion for capital expenditure, largely for the development of more shopping malls, residential and other commercial projects within and outside the Philippines.

The company plans to have developed 10.96 million square meters of shopping malls, 139,000 residential units in 41 projects; 2,500 leisure homes in 16 developments; 460,000 square meters of leasable space in seven office buildings; and 2,187 rooms in 10 hotels by 2018.

“I have announced that by the end of 2018, I will have 75 malls, so we’re working very hard and we’re well on our way. So far, we are on track,” Mr. Sy said.

For this year alone, the company intends to open five shopping malls, each requiring an investment of P2 billion on average.

“I still have three more malls coming up this year, which is basically the S Maison in Conrad Manila; the other one is Cherry Congressional because we expanded that into a mall and the third one is the SM East Ortigas,” Mr. Sy said.

Asked whether SM Prime will further expand in China, Mr. Sy replied: “We’re still going conservative with one a year. Actually, I’m very happy with our performance. People were saying China economy is going down [but] our growth is double-digit over there.”

“As you know... we had our first mall, the second mall came four years later then the third two years later and so on. Slowly, as we build the momentum, then we will continue to expand. So, we’re still very much on track,” Mr. Sy added.

SM Prime also continues to expand its residential, hotel and office segments.

“For the hotels, which was announced earlier, we have three or four that are in line, going to all the provinces. And then our office towers BPO (business process outsourcing) buildings, we’re also continuously building,” Mr. Sy said.

SM Prime, like other property developers in the country, expressed interest in further expanding in the provinces, particularly in Mindanao, given the incoming administration’s intention to develop the countryside.

“We have high hopes for Mindanao. Quite frankly, we’ve acquired a number of properties in Mindanao and we’re just waiting on the side although little by little, as you see we’re expanding,” Mr. Sy said.

“We have now the second [development] in Cagayan de Oro that’s coming up. We will soon be launching another one. But... if the peace and order is really fixed, I tell you Mindanao has a very big future,” he added, noting that SM Prime has already acquired property in Zamboanga, Butuan and Davao.

Asked whether the company will expand overseas alongside to a similar extent, Mr. Sy said: “Right now, there are some people offering interest, but we believe there’s still so much opportunity here in the Philippines. As we’ve seen so many foreign brands are still coming in. So there’s really a lot more opportunity here than in other countries.”

SM Prime closed 55 centavos or 2.14% higher at P26.20 on Monday.