THE country’s largest shopping mall operator recorded a 15% profit increase during the first quarter of 2018, fueled by its strategy of developing more malls and residential projects in the provinces.
SM Prime Holdings, Inc. (SM Prime) said in a statement on Monday that its net income stood at P7.6 billion for the first three months of the year, higher than the P6.6 billion it reported in the same period a year ago. Consolidated revenues accelerated by 14% to P23.4 billion during the January to March period.
“The growing revenue contribution of our mall operations in the provinces and increasing reservation sales of our residential projects in Metro Manila drove our bottom line higher and kept us in line with our first quarter target in 2018,” SM Prime President and Chief Executive Officer Jeffrey C. Lim said in a statement.
SM Prime’s shopping mall business generated 59% of the group’s overall revenues at P13.9 billion, up 10% year on year. The company benefited from the opening of 11 new malls in 2016 and 2017, which pushed rental revenues 12% higher to P11.9 billion for the period. Most of the newly opened malls are located in provinces such as Bulacan, Cavite, Rizal, Palawan, Cagayan, and Batangas.
Same-mall sales, or the performance of malls that have been open for more than a year, grew by 7% for the period.
The Sy-led company’s provincial malls now account for 52% of its total revenues, versus its 46% contribution in 2014.
This year, SM Prime will continue its provincial expansion with the opening of SM City Telabastagan in Pampanga, SM City Legazpi in Albay, and SM Center Ormoc in Leyte. The company has already opened SM Center Imus in Cavite and SM City Urdaneta Central in Pangasinan earlier this year.
SM Development Corp. (SMDC), SM Prime’s residential arm, improved its revenues by 25% to P7.5 billion for the quarter, or 32% of the group’s total revenues.
SMDC has been turning over units from Shore 2 Residences and S Residences in Pasay City, Fame Residences in Mandaluyong City, South Residences in Las Piñas City, and Spring Residences in Parañaque City, allowing the firm to register a double-digit increase in residential real estate sales.
Ready-for-occupancy units likewise saw strong demand from families of overseas Filipino workers, international buyers, and the emerging middle class.
Reservation sales, meanwhile, clocked in a 20% growth to P14.8 billion, although the number of units sold remained flat at 3,894.
SMDC will be launching 12,000 to 15,000 residential units in 2018, slated to be a mix of high-rise buildings, mid-rise buildings, and single-detached, house-and-lot projects.
On the other hand, SM Prime’s other businesses consisting of hotels, convention centers, and commercial properties increased its revenues by 8% to P2 billion for the quarter.
The company currently has a combined gross floor area of 464,000 square meters (sq.m.) for its Commercial Properties Group, which it looks to expand by 130,000 sq.m. with the launch of a third office building in the Mall of Asia complex this year.
There are also six hotels with more than 1,500 rooms, four convention centers, and three trade halls under SM Prime’s portfolio.
Shares in SM Prime went down 0.15% or five centavos to close at P32.35 each at the Philippine Stock Exchange on Monday. — Arra B. Francia