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SM Prime malls, residences drive 18% profit rise

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EARNINGS of SM Prime Holdings, Inc. in 2019 rose 18% to P38.1 billion, driven by the sustained growth of its mall and residential network across the country.

In a statement Monday, the Sy-led property developer reported double-digit growth in its consolidated net income amid a 17% increase in its consolidated operating income to P56.7 billion.

The company’s total revenues last year also climbed 14% to P118.3 billion, fueled by the robust growth of its mall operations and residential developments.

By business segment, revenues from SM Prime’s mall business increased 8% to P57.8 billion, coming from a 7% same-mall-sales growth across its network. Same-mall-sales growth is SM Prime’s measure of growth in its existing malls.

Sales from cinema and event tickets also climbed 6% to P5.5 billion last year, while revenues from amusement, merchandise sales and others grew 15% to P3.9 billion.

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SM Prime closed the year with 74 malls in the Philippines totaling 8.5 million square meters of gross floor area (GFA), and seven malls in China with 1.3 million square meters of GFA.

The residential business of SM Prime, which is handled by SM Development Corp. (SMDC), saw a 24% jump in revenues to P45.2 billion. This came from a 17% increase in consolidated costs of real estate sales to P20.8 billion and a 39% rise in operating income to P17.1 billion.

The company traced the growth to higher construction accomplishments in its projects last year, further boosted by the fast take-up of its ready-for-occupancy projects in Pasay City and Makati City.

SMDC closed the year with P90 billion in reservation sales, a 24% rise from a year ago. This translates to an 11% increase in unit sales to 23,424 units.

Other business segments had a combined revenue of P9.6 billion last year, up 14% year-on-year. This includes revenues from SM Prime’s Commercial Properties Group and SM Hotels and Convention Centers, which grew due to the full-year contribution of ThreeE-Com Center office building in Pasay City and the opening of NU Mall of Asia and Park Inn by Radisson hotels in Iloilo and Quezon City last year.

By the end of 2019, SM Prime had 12 office buildings with a GFA of 695,000 square meters, eight hotels with more than 1,900 rooms, four convention centers and three trade halls.

“SM Prime’s continuous growth was brought about by our strategic expansion in the country’s developing cities. We look forward to 2020 as we strengthen our presence in more key areas in the Philippines through sustainable integrated property developments that have great potential to further contribute to the growth of the overall economy,” SM Prime President Jeffrey C. Lim was quoted as saying in the statement.

For 2020, SM Prime is scheduled to open three to five new malls in key provincial cities, along with 15,000 to 20,000 residential units varying from high-rise and mid-rise buildings and single detached house and lot projects.

It is also targeting to launch the first tower and podium of FourE-Com Center in Pasay City, translating to 110,000 square meters of additional GFA. It will open a Park Inn by Radisson hotel in Bacolod and expand the Park Inn by Radisson in Clark within the year, along with the opening of SMX Clark and Olongapo City Convention Center.

Shares in SM Prime at the stock exchange were flat at the close of Monday’s trading at P41.70 apiece. — Denise A. Valdez

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