Property firm SM Prime Holdings Inc., a unit of the Henry Sy-led SM Investments Corp., posted a 12-percent increase in net income for the first half of the year, with sales growth seen across all its business segments.
Net income for the first six months rose to P9.80 billion on a 7-percent increase in revenue to P33.42 billion.
For the second quarter alone, net profit improved also by 12 percent to P5.22 billion from P4.66 billion a year earlier, while revenue for the three-month period grew 11 percent to P18.08 billion.
SM Prime President Hans Sy said he expects “sustained” growth in the company’s net profit and revenues will bring their levels up to previously set targets for the year.
“The results were very encouraging as we sustained our growth from the previous quarter. This gives us confidence to meet our full-year target. We are looking forward to hitting our key targets for the rest of the year. This should pave the way for achieving our five-year roadmap set in April this year,” Sy said in a statement.
Incorporated in 1994, SM Prime is the property unit of SM Group’s SM Investments Corp., which also holds retail unit SM Retail Inc. and banking subsidiary BDO Unibank Inc.
SM Prime’s roadmap shows the company aims to double the P59.794 billion total revenue and P16.725 billion net income posted in 2013 within the next five years.
The roadmap also involves some P400 billion in capital expenditures up to 2018 – to be financed by both internally generated cash and debt – which would also double the firm’s mall portfolio to 85 from 48, residential projects to 41 from 21, office buildings to seven from three currently, hotels to 10 from five, and leisure-oriented projects to eight from four at present, the company said.
A breakdown of the first-half 2014 revenue shows rental revenue took up 50 percent of total sales, rising 12 percent to P17.67 billion on the back of new mall openings in 2013 and part of 2014, as well as the 101,000-square meter expansion of SM Megamall. Second-quarter rental sales rose 13 percent to P9.11 billion.
Real estate sales—contributing 38 percent of total revenue—dropped 4 percent to P11.9 billion, dragged by the 17-percent fall in first-quarter sales take-up from Breeze and Grace Residences. Reversely, second-quarter real estate revenue posted 9-percent growth to P6.89 billion as Grace and Breeze Residences sales were realized.
SM Prime expects the housing unit group to sustain its growth for the rest of the year as more projects reach completion, while new housing projects are lined up for launch over the next 12 months, the company said.
Overall operating expenses for the first half went up to P19.26 billion, with the second quarter accounting for a total of P10.44 billion.
SM Prime also plans to open three new malls this year: in Cauayan City, Isabela and Angono, Rizal, as well as Zibo City in Shandong, China.