SM Prime earns P1.07-B in Q1

Mall operator SM Prime Holdings Inc. sustained its steady growth, as it reported a 7.5-percent increase in its net income for the first quarter this year to P1.075 billion, from P1 billion during the same period a year ago.

In a statement, SM Prime said the rise in earnings was bolstered by the 10.3-percent hike in consolidated revenues, fueled by the good performance of its mall and food court leasing, cinemas and amusement operations. Revenues reached P2.04 billion compared with P1.85 billion a year earlier.

Lease operations continued to be the biggest source of revenues for the company, contributing P1.59 billion or 8.9 percent higher than the 2002 level of P1.46 billion.

Cinema ticket sales went up by 20 percent to P362.51 million from P302.25 million, largely due to several blockbuster movies shown. Amusement operations, pumped in P94.38 million in revenues, reflecting a 7.68-percent increase from P87.65 million in 2002.

Operating expenses, on the other hand, amounted to P848.06 million, up by 12.42 percent from the previous year’s P754.33 million. This was due to higher cost of film rentals as a result of the increase in cinema revenues and the increase in depreciation expense due to the opening of new malls.

The provision for income tax, moreover, grew by 117.3 percent to P212.9 million from P98 million last year as a result of higher expenses incurred in relation to the company’s $150-million Eurobond issuance which matured and was fully paid in 2002.

SM Prime also attributed the improvement in its net income to the decrease in interest expense and the decline in the foreign exchange loss as a result of full payment of the $150-million Eurobond which matured in February last year.

This year, the company plans to open three new malls — SM City Baguio, SM City Marilao in Bulacan and SM City Lucena in Quezon Province. These new malls will bring the number of SM malls to 17 and the total gross floor area to around 2.2 million square meters.

The company said it will continue with its landbanking activities to ensure adequate sites for its mall expansion program. To date, SM Prime has a total landbank of 144 hectares in eight strategic locations all over the country including Bacolod, Marikina, Laguna, Bulacan, Pangasinan, Lucena, Cavite, Batangas and Cabanatuan.

As the flagship firm of retail tycoon Henry Sy, SM Prime continues to undergo its nationwide expansion binge, targeting to put up an average of two supermalls every year for the next five years.