• One-time gain lifts SM Prime’s Q1 net

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    PROPERTY giant SM Prime Holdings Inc.’s first-quarter net income soared 176 percent from a year earlier to P12.6 billion on strong sales and a one-time extraordinary gain of P7.4 billion from the sale of marketable securities during the period.

    SM Prime president Hans Sy said that without the one-time gain, the company’s profit grew by 14 percent to P5.2 billion.

    Consolidated revenues improved by 9 percent to P16.7 billion from P15.3 billion in the same period last year.

    “2015 promises to be a strong year and the first-quarter numbers seem to reflect that. There are a lot of reasons to be optimistic, with consumer spending getting a boost from lower oil prices and improved consumer confidence,” Sy said in a statement.

    “The strong economy provides much motivation for us to expand and grow our business more aggressively to take advantage of new opportunities, particularly in the provincial areas. We can grow in all areas of business: malls, residences, commercial and tourism-related developments,” he said.

    Revenue contributors were rental revenues from its retail and commercial spaces (57 percent share), revenue from the residential housing segment (32 percent), and sales from its cinema and amusement businesses (11 percent).

    In the first three months of the year, rental sales grew by 10 percent to P9.4 billion boosted by contribution from new malls and the expansion of existing malls from 2013 to 2014.

    These malls included SM Aura Premier in Taguig, SM City BF in Parañaque, Mega Fashion Hall in SM Megamall in Mandaluyong, SM City Cauayan in Isabela and SM Center Angono in Rizal. The gross floor area of the combined malls and office portfolio totaled 564,000 square meters.

    Revenue from the housing segment increased 7 percent to P5.4 billion from P5 billion in the same quarter in 2014 on higher sales take-up on completed projects launched from 2010 to 2013.

    These projects include Shore Residences in Pasay, Green Residences in Manila, Wind Residences in Tagaytay, Grace Residences in Taguig and Shell Residences in Pasay.

    Condominium reservation sales also advanced 47 percent to 3,721 units from a year ago, which resulted in a 34-percent rise in value to P9.5 billion from P7.1 billion in the same quarter last year.

    Cinema sales decreased slightly to P1.0 billion from P1.1 billion the previous year on fewer blockbuster films in the first three months of the year. But amusement and other sales increased by 32 percent to P900 million on the strong performance of amusement parks, especially the opening of Sky Ranch Pampanga.

    The company’s P9.2 billion overall cost and expenses were higher than the P8.8 billion for the same period last year on the 4.5-percent increase in taxes, licenses, depreciation and amortization on the building of new malls during the past 12 months.

    For 2015, SM Prime is targeting to open four malls — SM City Sangandaan in Caloocan; SM City San Mateo in Rizal; SM City Cabanatuan in Nueva Ecija; and SM Seaside City Cebu — which will amount to 800,000 additional square meters of floor area.

    The company will also launch five new high-rise condominium towers this year, totaling about 11,000 units, across Las Piñas, Makati, Pasay and Parañaque, and at the Mall of Asia (MOA) Complex. For offices, FiveE-comCenter will be ready for occupancy. The Conrad Manila hotel will be launched by yearend at the MOA Complex.

    From 2015 to 2018, the company plans to spend P300 billion for capital expenditure in line with its previously announced five-year plan from 2013 to 2018. Of this amount, P85 billion will be spent this year to fund project launches and developments. Capex for this year will be sourced from internally generated funds (60 percent) and from debt raisings (40 percent).

    The goal of the five-year master plan toward 2018 is to spend P400 billion to double the 2013 net income and revenues, as well as its existing portfolio of malls, offices, hotels and other leisure-related developments both in the Philippines and China.

    SM Prime executive vice president Jeffrey Lim has said the firm will build “20 more malls” in the next three years to complete the five-year blueprint, which will increase the company’s inventory to 70 malls by end-2018 from the current 50 malls.

    Lim said the five-year plan also includes a P20-billion yearly budget for the company’s China expansion towards 2018, which will include the development of nine malls and its integrated residential, office and hotels known as “microcities.”

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