SM Prime’s Net Income Increases by 16% in 3Q2017
(06 Nov 2017. Pasay City, Philippines) SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading integrated property company recorded a 16% net income growth in the third quarter of the year to PHP5.66 billion from PHP4.86 billion in the same period last year. This led to a 15% increase in net income in the first nine months of 2017 to PHP20.05 billion from PHP17.45 billion of last year. SM Prime’s consolidated revenue posted a 12% increase to PHP64.69 billion from PHP57.78 billion, while overall operating income grew by 16% to PHP30.14 billion from PHP25.87 billion in the same period under review. The growth was due to additional rental revenues from mall expansions, consistent improvement in same-mall sales, and higher contribution from residential sales.
“SM Prime’s performance in the third quarter is a testament to the buoyant overall economy that benefits the whole property market. The timely expansion of our malls and launches of our residential projects in the provinces are positively contributing to the strong performance of our Company. Given all these, we remain optimistic that we are on track to meet our growth target this year,” SM Prime President Jeffrey C. Lim said.
In the first nine months of 2017, mall revenues posted a 10% growth to PHP38.58 billion from PHP35.07 billion last year. The mall’s operation contributed 60% of the consolidated revenues. Mall rentals went up by 10% to PHP32.83 billion from PHP29.74 billion, primarily due to the expansions and new malls that opened in 2016 and 2017; while the same-mall-sales sustained its 7% growth. Cinema and event ticket sales slightly dropped by 3% to PHP3.34 billion from PHP3.44 billion due to fewer blockbuster movies; whereas revenues from amusement and merchandise sales surged by 26% to PHP2.40 billion from PHP1.90 billion in the same period being reviewed. The consolidated mall operating income improved by 12% to PHP21.38 billion from PHP19.14 billion and the operating margin was maintained at 55% in the same period.
Currently, SM Prime has 65 shopping malls in the Philippines and seven in China with a GFA of 8.0 million sqm and 1.3 million sqm, respectively. The company will open two new malls before the year-end, namely SM Center Lemery in Batangas and SM Center Pulilan in Bulacan, which will bring our provincial malls to 44 from 38 in 2016.
The residential group’s revenues, which account for 32% of the consolidated revenues, expanded by 10% to PHP20.50 billion from PHP18.66 billion. The increase in sales take-up of ready-for-occupancy (RFO) units and construction accomplishments of SM Development Corporation (SMDC) drove the revenues higher. These revenues mostly came from Shore 2 Residences in Pasay City, Air Residences in Makati City, Fame Residences in Mandaluyong City, Trees Residences in Quezon City, Grass Residences in Quezon City, and S Residences in Pasay City. Consolidated costs of real estate grew by 7% to PHP10.31 billion from PHP9.63 billion due to higher recognized real estate sales, while operating income grew by 20% to PHP6.17 billion from PHP5.13 billion.
Reservation sales increased by 18% to PHP42.08 billion from PHP35.52 billion, while unit sales increased by 3% bringing it to 12,963 units from 12,579 units in the same period under review.
The rest of SM Prime’s businesses, which account for 8% of the consolidated revenues, registered revenue growth of 39% to PHP5.76 billion in the first nine months of the year from PHP4.13 billion last year. Operating income increased by 45% to PHP2.71 billion from PHP1.87 billion, while operating income margin improved by 47% from 45% in the same period being reviewed. The growth came from rental revenues of FiveE-com Center and Conrad Manila, which are launched in November 2015 and June 2016, respectively.
To date, SM Prime has six office buildings with a combined GFA of 383,000 sqm. ThreeE-Com and FourE-Com Centers in the Mall of Asia Complex are expected to add an estimated GFA of 320,000 sqm in the Company’s office portfolio once completed in 2018 and 2020, respectively. SM Prime has six hotels with over 1,500 rooms, four convention centers, and three trade halls in its portfolio.
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