SM Prime Holdings Inc., which is known for its shopping mall operations, said its income declined by 46 percent in the first half, as the lockdown implemented by the government to contain the spread of Covid-19 affected most of its operations.
Revenues of the country’s largest property developer fell 23 percent to P43.7 billion, from last year’s P57 billion.
“The first half of 2020 has been one of the most challenging periods we’ve faced as a company,” Jeffrey C. Lim, the company’s president, said.
“With the government maintaining the implementation of quarantine protocols in most key areas in the Philippines where our businesses are, SM Prime is committed to sustaining its operations while adhering to the strict safety measures implemented by the government and continue providing convenience to our customers.”
SM Prime’s rental revenues from its domestic malls dropped 44 percent to P13.1 billion, from last year’s P23.3 billion due to lower mall revenue, which declined by 49 percent to P14.4 billion, from P28.1 billion a year ago.
The decline in rental revenues was due to the waived rent and rental discounts it granted to tenants since the start of the implementation of quarantine measures in March, which amounted to P11 billion as of end-June.
SM Prime’s residential business, led by SM Development Corp., recorded an 11-percent jump to P23.7 billion revenue in the first half, from P21.4 billion in the same period last year. This accounts for 54 percent of the consolidated revenue of the company.
SMDC said it generated P42.4 billion in reservation sales in the first six months of the year, amid the quarantine measures.
Construction works on SM Prime’s new and latest residential projects have resumed, pursuant to national government’s safety protocols. SM Prime cushions the effect of safety protocols on construction completion with its available inventory of 12,000 units as of June.
Revenues from the company’s commercial properties business grew 16 percent to P2.5 billion. Operating income reached P2.2 billion, 22 percent higher than P1.8 billion during the first half of 2019.
The offices business of SM Prime has business process outsourcing (BPO) firms as primary tenants, which were allowed by the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) to continue operating during the quarantine period.
The hotels and convention centers business segment contributed P1 billion despite limited operations. Conrad Manila, Park Inn Clark, Park Inn North EDSA and Park Inn Iloilo remained operational to cater to BPO employees and returning overseas Filipino workers and seafarers.
The company’s biggest events center, the Mall of Asia Arena, was converted into a swabbing facility in partnership with various government agencies to help frontliners as well as returning overseas workers.