HENRY SY-led SM Prime Holdings, Inc. saw recurring net income grow 16 percent last year to P27.6 billion from P23.8 billion in 2016 on the back of increased sales from new malls and residential projects, underpinned by the sustained economic growth.
“SM Prime continues to benefit from the sustained overall economic progress of the Philippines that resulted to higher spending power for most Filipino families,” SM Prime President Jeffrey Lim told the stock exchange on Monday.
“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,” he added.
SM Prime reported consolidated revenues of P90.9 billion for 2017, up 13.9 percent from the P79.8 billion registered in 2016. Meanwhile, overall operating income grew 15 percent to P40.6 billion from P35.3 billion the previous year.
On the residential front, the company’s wholly-owned property developer SM Development Corp. grew its revenue by 18 percent to P30 billion in 2017, while operating income surged 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 City, Air Residences in Makati City, and Fame Residences in Mandaluyong City as well as continued increase in sales take-up of Ready-for-Occupancy (RFO) units,” the company said.
SM Prime said its malls business expanded its revenue by 9.46 percent to P53.2 billion, bolstered by the rising contribution in rentals and new malls that were launched in 2016 and 2017, including SM City San Jose Del Monte, Trece Martires, East Ortigas, CDO Downtown Premier, S-Maison at Conrad Manila, SM City Puerto Princesa, and SM Center Tuguegarao Downtown.
Meanwhile, same-mall-sales growth was consistent at 7 percent across all mature malls. Revenues from amusement and merchandise sales also rose by 8 percent to P3.1 billion in 2017 from P2.9 billion in 2016 with growth coming from additional outlets opened 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.
SM Prime said its other businesses registered revenue growth of 32 percent to P7.9 billion, while operating income increased by 35 percent to P3.6 billion. Operating income margin improved to 46 percent from 45 percent.
To date, SM Prime said it has seven office buildings with a combined gross floor area (GFA) of 456,000 square meters (sqm).
“ThreeE-Com and FourE-Com Centers in the Mall of Asia Complex, Pasay City, which are set to be completed this 2018 and in 2020, will add a combined GFA of almost 320,000 sqm in the company’s office portfolio,” it added.