Pasay City, Philippines, 2016-Feb-24 — /EPR Retail News/ — SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading integrated property company, reported a recurring net income growth of 14% in 2015 to PHP20.9 billion on the back of an 8% increase in consolidated revenues to PHP71.5 billion in the same period. On a consolidated level, net income increased 54% to PHP28.3 billion, inclusive of the PHP7.4 billion one-time trading gains on marketable securities booked in the first quarter of the year.
“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% growth in household consumption. 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,” SM Prime President Hans T. Sy, said.
Rental revenues from malls and commercial spaces, which accounted for 57% of the consolidated revenues, surged at 12% to PHP40.7 billion from PHP36.5 billion in the previous year. The strong growth in rental revenue was sustained by SM Prime’s expansion across all its business portfolio since 2013. Growth can be traced to new malls such as 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 of 728,000 square meters. Rental growth was also complemented by the opening of office buildings SM Cyberwest in Quezon City, and FiveE-comCenter in Pasay City, both fully occupied. Combined, these office spaces added GFA of 171,000 sqm. Excluding the new malls and expansions, same-store rental growth continued to exhibit 7% increase.
SM Prime’s real estate sales, accounted for 31% of consolidated revenues, sustained its revenues at PHP22.2 billion in 2015. The flat performance of revenues was primarily due to lower revenue recognition from the almost completed housing projects that were launched in 2011 and 2012. On the other hand, the recently launched projects continue to enjoy brisk sales, with SM Development Corp. (SMDC) posting higher reservation sales by 12% year-on-year to 14,390 units in 2015. As a result SMDC, which contributes 93% of the housing group’s real estate sales, achieved a 15% increment in sales value worth PHP39.8 billion from PHP34.6 billion last year. Reservation sales were largely generated from Shore 2 Residences, Shore Residences, Air Residences, Jazz Residences and Fame Residences and in the cities of Pasay, Makati, and Mandaluyong, respectively. For the period, housing group’s net income increased by 8% to PHP5.1 billion from PHP4.7 billion in 2014.
Consolidated costs on real estate dropped by 2% to PHP12.0 billion mainly due to the improving cost efficiencies, tighter monitoring and control of construction costs. This generated higher gross profit margin on real estate sales to 46% in 2015 from 44% in 2014. Net income margin likewise stood at 23% from 21% in the same period.
Cinema and event ticket sales, which represented 7% of consolidated revenues, recorded a 12% growth in 2015 to PHP4.8 billion. International movies continued to dominate Philippine Cinema. 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 stood at PHP3.8 billion, up by 14% from PHP3.3 billion. The growth exhibited was mainly driven by the opening of Sky Ranch Pampanga, improvement in hotels’ food and beverages income as well as an increase in sponsorship income.
To date, SM Prime has a total of 56 Malls in the Philippines with total retail space of 7.3 million square meters. This includes SM Seaside City Cebu, SM Center Sangandaan, SM Cherry Shaw, SM City Cabanatuan, SM City San Mateo and SM Megacenter Cabanatuan which opened November 27, October 23, October 13, October 9, May 15 and April 24, respectively. In China, SM Prime has six shopping malls with a GFA of 0.9 million sqm including the recently opened SM City Zibo. Taking into account both Philippine and China malls, SM Prime’s total retail space is at 8.3 million sqm.
SM Prime presently has 27 residential projects in the market, 25 of which are in Metro Manila and two in Tagaytay. For 2016, SM Development Corporation will launch between 11,000 to 14,000 units in Quezon City, Bicutan and Sucat in Paranaque, Las Piñas and Pasay at the Mall of Asia Complex. SM Prime is also set to launch new mixed-use developments in Bulacan, Pampanga and Cavite.
Currently, the Commercial Properties Group has five office buildings with an estimated gross floor area of 318,000 sqm. ThreeE-Com and FourE-Com Centers are under construction and scheduled for completion in 2017 and 2019, respectively. For hotels and convention centers, the Conrad Hotel Manila is expected to open in the second half 2016. The 347-room hotel will further enhance the value of the properties within the whole Mall of Asia (MoA) Complex, given that this will be the first 6 star hotel in the Pasay City area.
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.
For further information, please contact:
Vice President, Investor Relations
SM Prime Holdings, Inc.
Tel. no.: +632 862 7940