Rather than putting people off shopping, a slowing economy last year prompted them to spend more time in shopping malls in place of more expensive leisure pursuits, analysts said.
"Malls offer cheap entertainment. At times like this, people look for a cheaper alternative. Going to the mall is a lot cheaper than going abroad or maybe even going out of town for a vacation," said BPI Securities investment analyst Spencer Yap.
Analysts forecast SM Prime’s 2001 net profit to be up 13 to 15 percent on the previous year’s P3.138 billion. A Multex Global Estimates consensus forecast is for a net profit of P3.55 billion or 40 centavos per share.
The company has projected more conservative growth of around 10 percent to a 2001 net profit of P3.45 billion with 12-percent profit growth forecast for 2002.
SM Prime’s Shoemart is the Philippines’ most successful shopping center brand. The group started as a small shoe store in downtown Manila in the early 1950s, expanding to a chain of 12 malls totaling 1.778 million square meters of space.
Last year, SM opened three malls, two in the capital and one in the province of Davao in the southern island of Mindanao.
This year, it plans to open three more malls, including the first phase of the mammoth Mallof Asia near the Manila waterfront which will have an estimated gross floor area of 500,000 square meters.
That growth is behind BPI Securities’ forecast of 15.36-percent profit growth to P3.62 billion, on revenues of P7.24 billion — up 17 percent from 2000’s P6.162 billion.
"The opening of new malls supported SM Prime’s 15.3 percent for 2001 . . . as in the past, the new malls provided the growth," BPI’s Yap said.
For the first nine months of last year, SM Prime posted a net income of P2.60 billion up 10 percent on P2.36 billion in the corresponding year-ago period.