EARNINGS of SM Prime Holdings, Inc. dropped 46% to P10.4 billion in the first half of 2020, due to some P11 billion in waived rent and rental discounts to mall tenants during the coronavirus-related lockdown.

In a statement, Monday, the operator of the country’s largest mall network said its consolidated revenues fell 23% to P43.7 billion during the six months to June.

Revenues from Philippine malls were slashed 49% to P14.4 billion, pulling rent income down 44% to P13.1 billion.

The company directly attributed this decline to the help it extended to mall tenants, as it temporarily closed its mall network starting mid-March in compliance with the government’s lockdown order to contain the outbreak.

This offset the improvement in SM Prime’s residential business, handled by SM Development Corp. (SMDC), which reported an 11% revenue improvement to P23.7 billion. SMDC made up 54% of the group’s consolidated revenues as it recorded reservation sales of P42.4 billion.

Revenues from the commercial properties business likewise grew 16% to P2.5 billion, resulting in a 22% rise in operating income to P2.2 billion. SM Prime said this was due to the steady operations of business process outsourcing (BPO) despite the strict lockdown.

Hotels and convention centers added P1 billion in revenues, accounting for the operations of Conrad Manila, Park Inn Clark, Park Inn North EDSA and Park Inn Iloilo. The company said these catered to BPO employees and returning overseas Filipino workers during the lockdown period.

“The first half of 2020 has been one of the most challenging periods we’ve faced as a company,” SM Prime President Jeffrey C. Lim said in the statement.

“With the government maintaining the implementation of quarantine protocols in most key areas in the Philippines where our businesses are, SM Prime is committed to sustaining its operations while adhering to the strict safety measures…,” he added.

SM Prime previously said it was allocating P100 million to beef up its e-commerce platforms to adjust to the changing shopping behavior of consumers.

It is also working with public transportation services such as tricycles to boost access between communities and its malls.

It recently launched a drive-in cinema to continue serving moviegoers.

Shares in SM Prime at the stock exchange lost P1.45 or 4.83% to P28.55 each on Monday. — Denise A. Valdez