SM Prime Holdings Inc., the property vehicle of the Sy family, saw its consolidated net income soar by 70 percent in the first nine months of the year on the back of expansions in all its businesses and a one-time gain in the first quarter of 2015.
The company said its consolidated net income in January to September climbed by 70 percent to P22.9 billion from P13.5 billion a year earlier. A trading gain of P7.4 billion “on marketable securities booked in the first quarter of the year” was included in its nine-month earnings.
Without the one-time gain, SM Prime’s core net income would have increased by 15 percent at P15.5 billion.
Consolidated revenues in the first nine months improved by 9 percent to P52.2 billion from P47.8 billion in the year-earlier period.
In the third quarter alone, core net income reached P4.2 billion, up 15 percent from the same quarter last year.
“SM Prime’s expansion across all its various business portfolios since 2013 has driven its strong financial performance this year. We expect SM Prime’s growth to be sustained as we continue to increase our mall footprint by 13 percent this year,” SM Prime President Hans T. Sy said in a statement.
“We are excited to launch SM Seaside Cebu later this year, a landmark project in the Visayas region,” he added.
SM Seaside Cebu is expected to open on November 28, adding 461,000 square meters (sqms) of gross floor area (GFA). SM Prime will also expand SM City Lipa in Batangas and SM City Iloilo, which will have expanded GFA of about 719,000 sqms.
By end-2015, SM Prime will have 55 malls in the Philippines and six in China with an estimated combined GFA of 8.3 million sqm.
Its January to September revenues mostly comprised of rental income which accounted for 56 percent, followed by real estate sales (32 percent), cinemas and events ticket (6.5 percent), and amusement income (5.5 percent).
SM Prime’s rental revenues increased by 11 percent to P29.4 billion from P26.4 billion due to the contributions of new malls and expanded shopping spaces of existing malls in 2013 and 2014, as well as new rental sources from the opening of FiveE-comCenter with a GFA of 130,000 sqms.
The firm’s real estate sales from residential projects also increased by 4 percent to P16.6 billion from P16 billion. Its SM Development Corp. (SMDC) alone contributed P3.8 billion, up 23 percent.
The costs of real estate projects edged down by 1 percent to P9 billion. This resulted in a higher gross profit margin on property sales at 46 percent during the nine-month period from 43 percent.
Reservation sales increased by 19 percent to P28.4 billion—equivalent to 10,297 units—from P23.3 billion.
Cinema and events ticket sales improved by 4 percent to P3.4 billion from P3.3 billion.
Amusement income from rides, bowling and ice skating operations, merchandise sales from snack-bars and sale of food and beverages in hotels surged by 30 percent to P2.8 billion from P2.1 billion.