SMDC income jumps 45% to P916M in first quarter

MANILA, Philippines - SM Development Corp. (SMDC) reported a 45- percent jump in net income in the first quarter this year to P916.3 million on the back of robust sales, and said it expects to sustain this positive trajectory for the rest of the year with the launch of five new projects.

In a briefing following the company’s annual stockholders meeting yesterday, SMDC vice-chairman and chief executive officer Henry Sy Jr. said the company remains upbeat on the property sector and sees its net earnings growing 10-20 percent this year, or even much higher, based on its strong first quarter results.

“At the rate we’re going, We just might go higher than the projected range,” Sy said, adding that sales take-up has been brisk, particularly from Filipinos working abroad.

Reflecting its bullishness on the highly-competitive residential market, SMDC has earmarked P17 billion for its capital expenditures this year, 42 percent higher than the P12 billion spent in 2010. The increased capital budget, which will be funded by existing available funds, includes landbanking as it intends to expand its presence across the country.

SMDC senior vice-president Rosaline Qua said the first quarter results were beyond what the company expected, pointing out that the company had pre-sold 2,480 units worth around P5.6 billion, a fifth of what it sold last year. For this year, SMDC is aiming to sell more than 10,000 residential units, topping sales for 2010.

Consolidated revenues jumped 70 percent to P3.4 billion, of which P3.3 billion came from real estate operations which accounted for a 69 percent hike from P1.9 billion the previous level. The growth was attributed to higher sales volumes and increased incremental completion rates of ongoing projects.

“We are highly encouraged by the company’s strong financial results for the first three months of the year. It clearly manifests the confidence that the market has on our products, which cater to the need for quality housing in the cities. As we continue pursuing this line of business, we are truly convinced that this positive performance will be sustained throughout the years,“ Sy said.

SMDC president Jose Cabunag, for his part, said: “Notwithstanding the past year’s accomplishments, your company is committed to sustain, if not exceed its growth and expansion, especially in this new decade when optimism in the country’s business and economic fronts abound.”

Jose T. Sio, advisor to the SMDC board, said the company may either tap the equities or debt market within the year depending on market conditions. “We will go out whenever it is good for us. It’s an open market for us,” he said.

Among the five new projects to be launched this year include MPlace Bicutan beside SM Bicutan and MPlace Ortigas as well as a new project in Makati and the expansion of Mezza Residences in Sta. Mesa, Manila.

Other projects in the pipeline include Wind Residences, a nine-tower, 20-story condominium building in Tagaytay City with an estimated development cost of P12 billion. The project, which falls under SMDC‘s SM Residences brands, will offer a total of 7,758 units when completed in 2015.

With a portfolio of 14 residential projects, the company has already completed its first high-rise development, Mezza, SMDC is set to turn over to customers the last cluster development of mid-rise project Chateau Elysee in Bicutan within the first half.

Also scheduled for turnover this year are Berkeley Residences in the first quarter, Grass Residences Tower 1 in the middle of the year and Field Residences Tower 2 and 3 in the first half and second half this year, respectively.