SM Prime's Recurring Net Income Up 12% in 1Q2016
SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading integrated property company, reported a core net income growth of 12% in the first quarter of 2016 to PHP5.8 billion while consolidated revenues rose 10% to PHP18.2 billion.
“SM Prime’s massive expansion last year propelled our performance this quarter. Our strong balance sheet coupled with consistent recurring revenue and income should allow us to pursue our growth plans this year and in the medium term,” SM Prime President Hans T. Sy, said.
In the first quarter, mall revenues surged 11% to PHP11.0 billion from PHP9.9 billion in the previous year. Mall revenues alone accounted for 60% of SM Prime’s consolidated revenues, for which 85% comes from rental income. Growth was largely driven by new malls and expansion of existing malls in 2015. These are SM Seaside City Cebu, SM City Cabanatuan, SM City San Mateo, SM Center Sangandaan and SM City Iloilo with a total gross floor area (GFA) of 738,000 square meters (sqm). Excluding the new malls and expansions, same-store growth averaged 7%.
To date, SM Prime has a total of 57 Malls in the Philippines and six in China with total retail space of 8.4 million sqm. This includes the newly opened SM City San Jose del Monte in Bulacan, with a GFA of 101,000 sqm. The company is set to open four more malls this year namely, SM City Trece Martires, SM City East Ortigas, Cherry SM Congressional and Cherry SM Antipolo. SM Prime also intends to expand its existing malls namely SM City Calamba and SM City Naga.
SM Prime’s residential group, which contributed 32% of consolidated revenues, posted revenues of PHP5.8 billion in the period being reviewed, up 5%. The increase can be traced to the higher construction accomplishments of SM Development Corporation (SMDC) projects launched in 2013 to 2015. These are Grass Residences, Shore Residences and Air Residences in the cities of Quezon, Pasay and Makati. This was also supported by the increase in sales take-up in M Place Residences, Field Residences and Jazz Residences in the cities of Quezon, Parañaque, and Makati.
Consolidated costs of real estate inched up by 2% to PHP2.9 billion mainly due to higher revenues recognized in real estate sales. This generated a higher gross profit margin of 47% from 46% in the same period last year. Net income margin likewise rose to 24% from 23%.
SM Prime currently has 28 residential projects in the market in Metro Manila and Tagaytay. SM Prime has already launched two new projects and an expansion of existing development equivalent to 4,000 units in Las Pinas, Bicutan and along Roxas Boulevard. For the rest of the year, SM Prime is still set to launch an additional 10,000 to 12,000 units located in the Mall of Asia Complex, Tagaytay, Quezon City, Bulacan, Cavite and Cabanatuan.
The Commercial Properties Group, which accounted for 5% of consolidated revenues, soared 16% to PHP 1 billion in revenues. The growth was complemented by the opening of SM Cyber West and Five E-Com Center, with a combined GFA of 171,000 sqm. These office buildings currently enjoy an average occupancy rate of 99%. The Commercial Properties Group presently has five office buildings with an estimated gross floor area of 318,000 sqm. ThreeE-Com and FourE-Com Centers are under construction and scheduled for completion in 2017 and 2019, respectively.
The hotels and convention centers business grew by 22% in the first quarter of 2016 to PHP 617 million in terms of revenues. The growth was propelled by an improvement in the average room and occupancy rates which was supplemented by the opening of 154-room Park Inn Clark in Pampanga. SM Prime will unveil the 347-room Conrad Manila in second half 2016.
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