(19 February 2018. Pasay City, Philippines) SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading integrated property company, registered a recurring net income growth of 16% in 2017 to PHP27.6 billion from PHP23.8 billion of the prior year. Consolidated revenues grew 14% to PHP90.9 billion in 2017 from PHP79.8 billion in 2016. Overall operating income improved by 15% to PHP40.6 billion in 2017 from PHP35.3 billion the previous year. The growth was driven by an increase in rental revenue from malls opened and expanded in 2016 and 2017 supported by strong sales take-up of the housing units.
“SM Prime continues to benefit from the sustained overall economic progress of the Philippines that resulted to higher spending power for most Filipino families. This translated to consistent growth of our key businesses that include higher rental revenues of our malls, increased residential units sales and growing contribution of our other business segments.” SM Prime President Jeffrey Lim said.
SM Prime’s mall revenues grew by 9% to PHP53.2 billion in 2017 from PHP48.6 billion in 2016. Rent income improved by 11% to PHP45.3 billion from PHP41.0 billion in the same period under review. The increase in revenue was due to the rising contribution of rentals from new and expanded malls that were launched in 2016 and 2017 namely SM City San Jose Del Monte, SM City Trece Martires, SM City East Ortigas, SM CDO Downtown Premier, S-Maison at Conrad Manila, SM City Puerto Princesa, and SM Center Tuguegarao Downtown. Meanwhile, same-mall-sales growth was consistent at 7% across all mature malls. Cinema and event ticket sales improved by 2% to PHP4.8 billion in 2017 from PHP4.7 billion in 2016. Revenues from amusement and merchandise sales also rose by 8% to PHP3.1 billion in 2017 from PHP2.9 billion in 2016. The revenue growth came from additional outlets opened in new malls. Mall operating income improved by 10% to PHP28.4 billion in 2017 from PHP25.8 billion in 2016, while the operating margin was steady at 53%.
SM Prime has 67 malls in the Philippines offering 8.0 million square meters (sqm) of gross floor area (GFA) and seven malls in China with 1.3 million sqm of GFA at 2017 year-end.
SM Prime’s residential group, led by SM Development Corporation (SMDC), posted a revenue growth of 18% to PHP30.0 billion in 2017 from PHP25.4 billion in 2016. Operating income improved by 24% to PHP8.9 billion from PHP7.1 billion. The growth is due to higher construction accomplishments of projects launched in 2013 up to 2016 namely Shore Residences and Shore 2 Residences in Pasay City, Air Residences in Makati City, and Fame Residences in Mandaluyong City as well as continued increase in sales take-up of Ready-for-Occupancy (RFO) units. Consolidated costs of real estate increased by 16% to PHP15.2 billion in 2017 from PHP13.1 billion in 2016. This led to improved gross profit margin of 49% from 48%, and net income margin of 24% from 23%, respectively.
SMDC’s reservation sales grew by 21% in terms of sales value to PHP57.8 billion in 2017 from PHP47.7 billion in 2016. In terms of unit sales, it was up by 4% to 17,259 from 16,670. The strong sales take-up came from projects that are within the Mall of Asia Complex in Pasay City such as Shore 2 Residences and Shore 3 Residences, as well as the Fame Residences in Mandaluyong City.
Other Business Segments
The rest of SM Prime’s businesses registered a revenue growth of 32% to PHP7.9 billion in 2017 from PHP6.0 billion of the previous year. Operating income increased by 35% to PHP3.6 billion from PHP2.7 billion, while operating income margin improved by 46% from 45% in the same period being reviewed. The Commercial Properties and the Hotels and Convention Centers business segments contributed to a revenue growth of 12% and 49%, respectively, in 2017. This is attributed to the opening of FiveE-Com Center and Conrad Manila.
To date, SM Prime has seven office buildings with a combined GFA of 456,000 sqm. ThreeE-Com and FourE-Com Centers in the Mall of Asia Complex, Pasay City, which are set to be completed this 2018 and in 2020, will add a combined GFA of almost 320,000 sqm in the Company’s office portfolio. The Hotels and Convention Centers currently has six hotels with over 1,500 rooms, four convention centers and three trade halls.
SM Prime remains committed to its role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life of millions of people.
For further information, please contact:
Vice President, Investor Relations
SM Prime Holdings, Inc.
Tel. no.: +632 862 7940