SM Prime Net Income up by 16% to PHP16.62 billion in 1H18
(06 August 2018, Pasay City, Philippines) SM Prime Holdings, Inc. (SM Prime), one of the largest integrated property developers in Southeast Asia, reported a 16% growth in its overall net income in the first half of 2018 to PHP16.62 billion from PHP14.39 billion of last year. Consolidated revenues increased by 15% to PHP49.77 billion from PHP43.25 billion in the same period last year, while overall operating income went up by 16% to PHP23.36 billion from PHP20.11 billion of the previous year.
“SM Prime’s expansion projects in various progressive provincial areas in the Philippines, as well as a bolstered presence in Metro Manila, allowed the Company to maintain double-digit growth in all of our businesses. We intend to deliver more integrated developments in the coming years anchored by lifestyle malls, luxurious yet affordable residences and other complementary amenities across the country. We believe that synergy among our businesses is key to sustaining our revenue and income growths, while also improving the lives of the communities we serve,” SM Prime President Jeffrey C. Lim said.
Strong Provincial Expansion of Mall Operations
In the first half of 2018, consolidated mall revenues rose by 12% to PHP28.71 billion from PHP25.68 billion of last year. This accounts for 58% of SM Prime’s consolidated revenues. Rental revenues improved by 13% to PHP24.49 billion from PHP21.75 billion, driven by the 8% same-mall-sales growth as well as by the increasing contribution from our newly opened and expanded malls. Cinema and event ticket sales are up by 10%, recording PHP2.59 billion from PHP2.35 billion of the same period last year, pushed by blockbuster movies shown between April and June such as “Avengers: Infinity War”, “Jurassic World: Fallen Kingdom”, and “Deadpool 2”.
Other revenues including leisure, entertainment and merchandise sales contributed PHP1.64 billion, a 4% increase from the same period last year. Mall operating income increased by 12% to PHP15.90 billion from PHP14.18 billion, while the operating income margin was stable at 55%.
SM Prime has 77 malls – 70 in the Philippines and seven in China. The Company has opened SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan and SM City Telabastagan in Pampanga in the first half of the year. Two more malls will open this year and these are SM City Legazpi in Albay and SM Center Ormoc in Leyte.
High Demand for High-rise Residential Developments
SM Prime’s residential group, which accounts for 34% of consolidated revenues, recorded a 23% increase in revenues to PHP17.05 billion in the first half of 2018 from PHP13.91 billion in the same period last year. High-rise housing projects in Metro Manila that were launched from 2015 to 2017 continue to drive the revenue growth of this segment.
SM Development Corporation (SMDC), the primary residential unit of SM Prime, recorded a 25% increase in reservation sales to PHP34.45 billion from the PHP27.55 billion reported in the first semester of 2017. This translates to a 7% increase in unit sales to 9,319 units from 8,699 units. Projects such as Shore 3 in Pasay City, Bloom Residences in Parañaque City, Fame Residences in Mandaluyong City, and Red Residences in Makati City are major contributors to the increase in sales among local and foreign buyers.
Solid Contribution from Other Businesses
SM Prime’s other businesses, led by the Hotels and Convention Centers and the Commercial Properties Group, posted revenue growth of 10% to PHP4.11 billion in the first half of the year from PHP3.74 billion of the same period last year. Operating income increased by 13% to PHP1.99 billion from PHP1.77 billion while the operating income margin improved to 48% from 47% in the same period under review.
SM Prime’s Commercial Properties Group currently has nine office buildings with GFA of around 481,000 sqm. The Company will launch in the 2nd half of 2018 the ThreeE-Com Center in the Mall of Asia Complex, Pasay City, which will add 130,000 sqm of GFA. Meanwhile, the Hotels and Convention Centers – which has six hotels with more than 1,500 rooms, four convention centers and three trade halls – will start the expansion of Park Inn – Clark in Pampanga also in the 2nd half of the year.
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