SMDC income jumps 54% to P1.93 billion in 1st half

MANILA, Philippines - Tycoon Henry Sy’s residential development arm SM Development Corp. (SMDC) jacked up its net earnings by 54 percent in the first half of the year on the back of robust real estate operations.

In a financial report submitted to securities regulators, SMDC said its consolidated net income reached P1.93 billion during the period as against P1.25 billion in the same period a year ago.

Revenues jumped 65 percent to P7.14 billion, of which P6.86 billion came from a 67 percent rise in earnings from real estate operations.

SMDC attributed the surge in real estate operations to strong sales and increased momentum in the construction of its various projects in Metro Manila and Tagaytay City.

For the period January to June 2011, SMDC pre-sold 4,936 residential units worth approximately P10.7 billion.

“The highly favourable results of SMDC reflect the success of the business model that we have developed within the group. We have set a course that serves the immediate needs of a growing market that was long unnoticed and unserved by the industry. We shall continue to improve on the foundation we have so far created for our market through constant innovation and better designs and lifestyles, yet still be affordable. While we are at this, we shall remain alert for opportunities that may arise in the coming years, which would optimize the business synergies between SMDC and the SM Group,” said Henry Sy Jr., vice chairman and chief executive officer of SMDC.

Apart from high earnings growth, SMDC maintains a very healthy balance sheet with a net debt-to-equity ratio of only two percent.

SMDC raised a total of P26.4 billion from three separate funding initiatives, which included two rights issues and a domestic bond deal. Proceeds are now being used to beef up landbanking and project development.

As of end-June 2011, SMDC’s total asset base stood at P52.22 billion, 44 percent higher than the same period a year earlier. Cash and cash equivalents, on the other hand, amounted to P9.22 billion.

Currently, SMDC has four fully completed projects, namely Chateau Elysee, Mezza Residences, Lindenwood Residences and Berkeley Residences. The company’s 10 ongoing projects are Grass Residences, Sea Residences, Field Residences, Princeton Residences, Light Residences, Jazz Residences, Sun Residences, Wind Residences, Blue Residences and M Place South Triangle.

To sustain its profitability and further widen its market reach, SMDC will launch six new projects this year in the cities of Pasig, Quezon, Pasay, Manila and Parañaque.