By Arra B. Francia, Reporter
SM Prime Holdings, Inc. increased its net income by 17% in 2018, driven by the growth of its shopping mall and residential property units.
In a statement issued Monday, the Sy-led firm said consolidated net income stood at P32.2 billion in 2018, higher than the P27.6 billion it posted in the year before. This came on the back of a 14% uptick in consolidated revenues to P104.1 billion.
In the fourth quarter, SM Prime’s net income rose 16% to P8.7 billion. Consolidated revenues also firmed up 13% to P29.5 billion during the quarter.
“Driven by our goal to deliver more innovative and sustainable lifestyle cities, SM Prime is aiming to sustain this growth trajectory in the coming years,” SM Prime President Jeffrey C. Lim said in a statement.
The listed property giant’s shopping mall unit accounted for bulk of its revenues at P59.3 billion, 11% higher year-on-year. The firm said it benefited from the malls it opened in the provinces from 2017 to 2018, particularly SM CDO Downtown Premier, SM City Puerto Princesa, and SM Center Tuguegarao Downtown, among others.
Mall rental income also increased by 11% to P50.5 billion during the same period. Same-mall sales growth across all mature malls, meanwhile, stood at eight percent.
The company ended 2018 with a total of 72 malls in the Philippines covering 8.3 million square meters (sq.m.) of gross floor area, in addition to seven malls in China spanning 1.3 million sq.m. It plans to launch four new malls this year, namely SM Center Dagupan, SM City Olongapo Central, SM City Butuan and SM Mindpro Citimall in Zamboanga.
SM Prime’s residential unit, SM Development Corp. (SMDC) delivered P36.5 billion in revenues last year, 22% higher than in 2017, resulting to a 38% climb in operating income to P12.3 billion.
SMDC attributed its positive performance to the higher construction accomplishment of projects launched from 2015 to 2017, including Shore 2 Residences, Coast Residences, Shore 3 Residences and S Residences in Pasay City, Fame Residences in Mandaluyong City, and Spring Residences in Parañaque City.
Reservation sales for the period went up by 25% to P72.3 billion. This translates to 21,157 unit sales, 23% higher year on year.
The company also noted that the consolidated cost of real estate sales went up albeit at a slower rate of 17% to P17.8 billion, which translated to higher gross profit margins of 50% from 49%. Net income margin also improved by 25% from 24% in 2017.
This year, SM Prime is set to launch around 15,000 to 18,000 units, from a combination of high-rise buildings, mid-rise buildings, and single detached house-and-lot projects.
Meanwhile, SM Prime’s other business segments generated combined revenues of P8.4 billion, seven percent higher year-on-year. Combined operating income accordingly rose by 10% to P4 billion.
SM Prime’s other business segments include the commercial properties, hotels and convention centers group. The company currently has a GFA of 623,000 sq.m. across 11 office buildings, with about 238,000 sq.m of office portfolio in the pipeline.
The company also operates six hotels with more than 1,500 rooms, four convention centers, and three trade halls. It will be unveiling two new hotels this year, namely Park Inn by Radisson-Iloilo and Park Inn Radisson-North EDSA.
Shares in SM Prime jumped P0.65 or 1.68% to close at P39.30 each at the stock exchange on Monday.