SM Prime Holdings posts 12% hike in 3rd quarter consolidated net income

SM Prime Holdings, Inc. posted a 12 percent increase in its third quarter consolidated net income to P3.7 billion from P3.3 billion a year earlier, the company said in a disclosure on Monday to the Philippine Stock Exchange.

 

The Sy-led company said the consolidated third quarter income brought the January to September  income to P13.5 billion and nine-month revenue to P47.8 billion, up by 12 percent and by 9 percent, respectively.

 

The company's rental revenues from retail and commercial space stood at P26.4 billion, 11 percent up from P23.8 billion last year in the nine-month period.

 

The increase in rental revenue was attributed to malls that opened and were expanded in 2013 and in 2014, including SM Aura Premier, SM City BF Paranaque, Mega Fashion Hall in SM Megamall, and SM City Cauayan.

 

The company said part of the growth also came from Two E-com center in Mall of Asia complex which opened last year and is now fully occupied.

 

Same -store rental went up by seven percent while real estate sales which accounted for 33 percent of consolidated revenues showed improvements, SM Prime said.

 

Meanwhile, SM Development Corp (SMDC). registered a 12-percent increase in third quarter revenues to P3.7 billion, from P3.3 billion a year earlier.

 

"The strong performance in the third quarter was driven by the increase in construction accomplishments of sold units in Grace, Shell, and Breeze Residences," the company said.

 

On the other hand, SMDC's revenues reached P16 billion for the nine-month period, slightly up from last year's P15.8 billion.

 

The company said it expected better results at the end of year as more projects were expected to be completed and housing projects that were lined up for launch for the next 12 months.

 

Ticket sales in cinemas stood at P913 million in the third quarter, 16 percent higher than last year's P789 million, while  ticket sales for the nine-month period stood at P3.3 billion.

 

Additional digital cinemas in new and expanded malls and launch of international and local blockbuster movies propelled the increase in ticket sales.

 

Same-store cinema ticket sales, on the other hand, grew by 16 percent.

 

Meanwhile, amusement and other revenues increased by seven percent in the third quarter to P623 million and by 20 percent in the nine-month period to P 2.1 billion due to strong patronage of amusement rides and additional recreational facilities that were provided.

 

SM Prime said its consolidated costs and expenses were "benign" citing an increase of 5 percent to P27.7 billion in the nine-month period, compared with last year's P26.4 billion.

 

A large part of the increase in cost and expenses came from depreciation expenses attributed to new malls. The company said film rentals were also higher as it corresponded to the growth in cinema ticket sales.

 

Real estate consolidated cost decreased by five percent to P9.1 billion in the January to September period due to efficient management and control of construction costs.

 

The company said it successfully issued in the third quarter P20 billion in retail bonds with tenors of 5.5 years, seven years, and 10 years and fixed interest rates of 5.1000 percent, 5.2006 percent and 5.7417 percent, respectively.

 

As of end September, SM Prime's net debt to equity ratio increased to 35:65. The company claimed it was indicative of a "very sound financial position and ability to carry out its long-term expansion programs."

 

The company has a planned capital expenditure of P60 billion for this year, where P30 billion is allotted for mall development, P22 billion for residential development, and the other for office buildings, hotels and land banking for various purposes.

 

“Our first year as a consolidated property business is proving to be rewarding not only in terms of our strong financial performance. We are now enjoying the scale and the synergy that the whole group brings to the table, which allows us to plan and execute our projects in a manner that will provide greater value and more enhanced lifestyles for our customers.” SM Prime president Hans T. Sy said. 

 

The SM Group consolidated in May 2013 its property companies and real estate assets under SM Prime. —NB, GMA News