SM Prime posts 9.7% profit hike in Q2

Shopping mall giant SM Prime Holdings Inc. reported a 9.7-percent growth in its second quarter net profit this year to P1.36 billion, from P1.24 billion a year ago, driven by higher rental revenues from newly-opened malls.

On a year-to-date basis, the company registered a net income of P2.77 billion or nine percent higher than the previous year’s P2.54 billion. Revenues likewise rose 17.34 percent from P2.71 billion to P3.23 billion.

In the second quarter alone, revenues amounted to P3.23 billion, up 19.2 percent from P2.71 billion a year earlier.

SM Prime said rental revenues accounted for the bulk of total revenues, rising 20 percent from P2.24 billion to P2.68 billion. This is largely due to rentals from new malls namely, SM City San Lazaro, SM Supercenter Valenzuela, SM Supercenter Molino, SM City Sta. Rosa, SM City Clark and the SM Mall of Asia.

The new malls opened with a total gross floor area of 862,215 square meters. Currently, these malls have an average occupancy level of 95 percent. Same store rental growth is at six percent.

Cinema ticket sales likewise exhibited strong growth, posting a 20 percent increase, SM Prime.

Income from operations went up 20 percent in the first half this year to P3.54 billion from P2.95 billion a year ago while operating expenses increased 13.8 percent to P2.55 billion from P2.24 billion.

SM Prime said its balance sheet remains robust with total investment properties accounting for 72 percent of total assets as of June 30, 2006 and 76 percent as of end-2005.

SM Prime currently has 25 supermalls strategically located nationwide with a total gross floor area of 3.4 million square meters.

Last May 21, the company opened the Mall of Asia to a huge crowd of close to a million. Located on a 60-hectare property overlooking Manila Bay, the 386,000-square meter complex consists of four buildings linked by elevated walkways — the Main Mall, the North Parking Building, the South Parking Building, and the Entertainment Center Building.

Other malls scheduled to open in 2006 are SM Supercenter Pasig and SM City Lipa. Total gross floor area will increase to 3.6 million square meters by end 2006.

SM Prime is also expanding SM North Edsa with the construction of Annex 3.

The company said it expects to exceed its yearend income target of between P5.3 billion to P5.4 billion.

Last year, SM Prime reported a net income of P4.62 billion on revenues of P10.21 billion.

SM Prime is a member of retail taipan Henry Sy’s SM Group, a conglomerate with interests in property development, retail, sale, wholesale and merchandising, banking and financial services, leisure and tourism and real estate sectors.