By Denise A. Valdez, Reporter
SM Prime Holdings, Inc. is investing P100 million to enhance its online platforms as it faces changing consumer behavior brought about by the coronavirus disease 2019 (COVID-19) pandemic.
“We acknowledge the growing popularity of e-commerce, especially during this pandemic, and SM Prime is allocating up to P100 million to accelerate our online presence with our e-commerce platform,” SM Prime President Jeffrey C. Lim said in the company’s annual stockholders’ meeting held virtually Monday.
The company will start by boosting its “Click & Collect” digital platform, which allows mall tenants to meet with customers virtually.
“We see e-commerce as a strategy to complement our malls business and connect our retail tenants to our customers,” Mr. Lim said.
SM Prime earlier said it was maintaining an P80-billion budget for capital expenditures (capex) this year despite a weaker performance in the first quarter. Its earnings slid 5% to P8.3 billion due to mall closures both in the Philippines and China.
In a phone call over the weekend, SM Prime Chief Financial Officer John Nai Peng C. Ong told BusinessWorld the company expects a bigger decline in its bottomline for the April-to-June period.
“We are still moving towards quarter end, but yes,” Mr. Ong said when asked about expecting the company’s profits to fall deeper.
“The quarantine started March 16 and significantly affected the second quarter. All of our malls were closed during that period… So you can have a sense kung ano ‘yung magiging financials natin (how our financials will look like),” he said.
Revenues from malls, which make up 86% of SM Prime’s total revenues, dropped 18% to P12.24 billion in the first quarter. Consolidated revenues stood at P12.78 billion, 14% lower from a year ago.
Despite this financial backdrop, SM Prime Chairman Henry T. Sy, Jr. said he expects SM Prime to maintain consumer demand in the coming weeks, especially with the easing of quarantine restrictions.
“SM, in the past, has faced a lot of challenges… During these times, we always see a trend in customer response. People continue to go to SM due to our flight to quality. We see the same trend today, even during the quarantine period,” he said in Monday’s meeting.
“Today, we are more prepared, responsive and resilient because we have people who continuously strategize for business growth. So as we face the new normal, we will provide facilities such as stronger Wi-Fi and safer malling areas. These will be suitable for the safety of our shareholders, and this will improve our business for the years to come,” Mr. Sy added.
The P80-billion capex this year will focus on projects that are ongoing and near completion, while projects in the pipeline will be subject to review, Mr. Ong said. SM Prime is also looking at an opportunistic land-banking for possible expansion.
While other companies have started a so-called workforce rightsizing to adapt to financial challenges, Mr. Ong said SM Prime’s direction is to support its employees and contractual partners.
“I think you can see yung ginagawa ng management (what the management is doing) is really to take care of, internally, employees, and externally, our partners. That has been the drive up to this point,” he said about the topic.
SM Prime and its subsidiaries have 11,695 regular employees as of end-2019. The whole SM Group, which includes SM Markets, BDO and the SM Store, reported some 157,288 employees in its 2019 sustainability report.
Shares in SM Prime at the stock exchange fell P2.60 or 7.82% to P30.65 each on Monday.