SM Prime Holdings Inc. (SMPH) said it had a recurring net income growth of 16 percent in 2017 to P27.6 billion, from P23.8 billion of prior year on the back of the expansion of its main shopping mall business.
Consolidated revenues grew 14 percent to P90.9 billion in 2017, from P79.8 billion in 2016, documents provided by SMPH said. The company added its overall operating income improved by 15 percent to P40.6 billion in 2017, from P35.3 billion the previous year.
“The growth was driven by increase in rental revenue from malls opened and expanded in 2016 and 2017 supported by strong sales take-up of the housing units,” said SMPH, the country’s largest property developer.
“[SMPH] continues to benefit from the sustained overall economic progress of the Philippines that resulted to higher spending power for most Filipino families,” SMPH President Jeffrey Lim was quoted in a statement as saying. “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.”
Mall revenues grew by 9 percent to P53.2 billion last year, from P48.6 billion in 2016. Rent income improved by 11 percent to P45.3 billion, from P41 billion in the previous year, due to rising contribution of rentals from new and expanded malls that were launched in 2016 and 2017. These were malls in San Jose del Monte in Bulacan, Trece Martires in Cavite, East Ortigas in Cainta, CDO Downtown Premier in Cagayan de Oro, S-Maison at Conrad Manila, Puerto Princesa and Tuguegarao Downtown.
Meanwhile, same-mall sales growth was consistent at 7 percent across all mature malls. Cinema and event ticket sales improved by 2 percent to P4.8 billion in 2017, from P4.7 billion in 2016.
Revenues from amusement and merchandise sales also rose by 8 percent to P3.1 billion in 2017, from P2.9 billion in 2016, due mainly to additional outlets in new malls.
Mall operating income improved by 10 percent to P28.4 billion in 2017, from P25.8 billion in 2016, while operating margin was steady at 53 percent.
SMPH has 67 malls in the Philippines offering 8 million square meters (sq m) of gross floor area and seven malls in China with 1.3 million sq m of gross floor area at 2017 year-end.
Its residential group, led by SM Development Corp. (SMDC) posted a revenue growth of 18 percent to P30 billion in 2017, from P25.4 billion in 2016. Operating income improved by 24 percent to P8.9 billion from P7.1 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, Air Residences in Makati and Fame Residences in Mandaluyong, as well as continued increase in sales take-up of ready-for-occupancy units.
Consolidated costs of real estate increased by 16 percent to P15.2 billion in 2017, from P13.1 billion in 2016.
SMDC’s reservation sales grew by 21 percent in terms of sales value to P57.8 billion in 2017, from P47.7 billion in 2016. In terms of unit sales, it was up by 4 percent 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.
The rest of SM Prime’s businesses registered a revenue growth of 32 percent to P7.9 billion in 2017, from P6 billion of the previous year.
Operating income increased by 35 percent to P3.6 billion, from P2.7 billion, while operating income margin improved by 46 percent from 45 percent in 2016. The Commercial Properties and the Hotels and Convention Centers business segments contributed to a revenue growth of 12 percent and 49 percent, respectively, in 2017. This is attributed to the opening of Five E-Com Center and Conrad Manila.