SM PRIME Holdings, Inc. expanded its earnings by a fifth during the third quarter of 2018, driven by the double-digit growth across its shopping mall and residential businesses.
In a statement issued Monday, the property business of country’s richest man Henry Sy, Sr. posted a net income of P6.82 billion in the July to September period, 20% higher than the P5.66 billion it generated in the same period a year ago. This followed a 16% uptick in revenues to P24.79 billion.
On a nine-month basis, SM Prime’s net income climbed 17% to P23.44 billion, after a 16% surge in revenues to P34.91 billion.
“SM Prime’s continuous growth as reflected in our first nine-month report shows the results of our strategic expansion in various developing cities in the country,” SM Prime President Jeffrey C. Lim was quoted as saying in a statement.
The listed firm’s shopping mall business contributed 58% to its revenues, while the residential unit provided 34%. Other businesses such as offices and hotels accounted for the remaining eight percent.
Mall revenues went up 12% to P43.26 billion, boosted by the performance of new malls opened mostly in the provinces from 2016 to 2018. Same-mall sales growth increased by eight percent, pushing mall rental revenues 12% higher to P36.83 billion.
Cinema and event ticket sales rose by 17% to P3.92 billion, following higher gross box office receipts from blockbuster movies such as Avengers: Infinity War, The Hows of Us, Black Panther, and The Nun.
With this, mall operating income expanded by 12% to P23.97 billion, with operating income margin at 55%.
SM Prime ended the nine-month period with 78 malls, seven of which are in China. The company will launch one more mall, SM Center Ormoc in Leyte, as well as Luxe Duty Free in the Mall of Asia complex, before the year ends.
For its residential business, SM Prime recorded a 23% uptick in revenues to P25.26 billion, while operating income booked a 34% increase to P8.29 billion.
SM Development Corp. (SMDC) attributed the increase to higher construction accomplishments for projects launched from 2015 to 2017, including Shore 2, Fame, South, Spring, Shore 3, and S Residences in different parts of Metro Manila.
Reservation sales at SMDC improved by 25% to P52.80 billion, indicating a 15% increase in number of units sold to 14,698 units during the period.
SMDC also noted the higher demand for their projects coming from international buyers, overseas Filipino workers, as well as the emerging middle class.
The Commercial Properties Group (CPG) and SM Hotels and Conventions Centers (SMHCC) generated combined revenues of P6.17 billion, seven percent higher year-on-year. Operating income accordingly went up seven percent to P2.89 billion.
SM Prime’s CPG unit currently operates 11 office buildings, covering a gross floor area of almost 623,000 square meters. Meanwhile, SMHCC has more than 1,500 rooms, four convention centers, and three trade halls under its portfolio.
“Through the solid performances of our core businesses, we are positive that we will deliver the net income growth we committed when we integrated five years ago. We intend to keep this growth trajectory to enrich more lives in the communities that we serve and deliver more sustainable integrated developments for the betterment of our country,” Mr. Lim said.
Shares in SM Prime climbed 1.16% or 40 centavos to close at P34.90 on Monday. — Arra B. Francia