SM Prime Holdings Inc. (SM Prime), the country’s leading integrated property company, said Monday its net income in 2015 shot up by more than half, propelled mainly by rental revenues from mall operations and one-time trading gains.
In a disclosure to the Philippine Stock Exchange (PSE), SM Prime said its net income last year rose 54 percent to P28.3 billion from P18.4 billion in 2014, inclusive of P7.4 billion in one-time trading gains on marketable securities booked in the first quarter of the year.
Recurring net income, or income derived mainly from its core business, grew 14 percent to P20.9 billion from P18.3 billion the year before.
“SM Prime sustained its overall net income growth in 2015 as the malls’ overall operations led the performance of the group. This is a reflection of the overall expansion of the economy that continues to be driven by the 6.2 percent growth in household consumption,” SM Prime president Hans Sy said in a statement.
“We believe we could sustain this growth in 2016 as we continue to focus on enhancing the synergies across our core business units as an integrated property developer,” he added.
Rental revenues from malls and commercial spaces, which accounted for 57 percent of the consolidated revenue, rose 12 percent to P40.7 billion from P36.5 billion in the previous year.
The strong growth was attributed to the opening of new malls during the year. These include SM Aura Premier, SM City BF Parañaque, Mega Fashion Hall in SM Megamall, SM City Cauayan in Isabela, SM Center Angono in Rizal, SM City San Mateo in Rizal, and the expansion of SM City Bacolod, all of which contributed an additional total gross floor area (GFA) of 728,000 square meters.
Meanwhile, SM Prime’s real estate sales, which accounted for 31 percent of consolidated revenue, amounted to P22.2 billion, flat from the year before, due to lower revenue recognition from the almost completed housing projects that were launched in 2011 and 2012.
SM Development Corp. (SMDC), on the other hand, posted 12 percent growth in reservation sales to 14,390 units in 2015. As a result SMDC, which contributes 93 percent of the housing group’s real estate sales, achieved a 15 percent increment in sales value worth P39.8 billion compared to P34.6 billion in 2014.
Reservation sales were largely generated from Shore 2 Residences, Shore Residences, Air Residences, Jazz Residences and Fame Residences located in the cities of Pasay, Makati, and Mandaluyong, respectively. For the period, the housing group’s net income increased 8 percent to P5.1 billion from P4.7 billion from a year before
Consolidated costs on real estate slightly dropped by 2 percent to P12 billion, mainly because of improving cost efficiencies, tighter monitoring and control of construction costs.
Cinema and event ticket sales, which represented 7 percent of consolidated revenue, grew 12 percent to P4.8 billion.
Other revenues, which consisted of amusement income from rides, bowling and ice skating operations, merchandise sales from snack-bars and sale of food and beverages in hotels rose by 14 percent to P3.8 billion from P3.3 billion from a year before.
To date, SM Prime has 56 malls in the country with total retail space of 7.3 million square meters. SM Prime currently has 27 residential projects in the market, 25 of which are in Metro Manila and two in Tagaytay City.
For this year, SMDC will launch between 11,000 and 14,000 units in Quezon City, Bicutan and Sucat in Paranaque, Las Piñas City and Pasay City. SM Prime is also set to launch new mixed-use developments in Bulacan, Pampanga and Cavite.
So far, the commercial properties group has five office buildings with an estimated gross floor area of 318,000 square meters.
“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,” the company said.