SM Prime posts P2.5-B net earnings in Q2

MANILA, Philippines - Shopping mall giant SM Prime Holdings Inc. reported better-than-expected financial results in the second quarter with net earnings rising 16 percent to P2.49 billion.

This brings SM Prime’s six-month net income to P4.92 billion or 15 percent higher than the P4.27 billion recorded the previous period.

Revenues also climbed 15 percent to P14.57 billion while EBITDA (earnings before interest, taxes, depreciation and amortization) went up 12 percent to P9.71 billion

Operating income likewise increased 15 percent to P7.78 billion. The growth was attributed to the eight-percent rise in same-store sales, new store openings, and the improved performance of the group’s malls in China.

SM Prime’s four malls in China are located in the cities of Xiamen, Jinjiang, Chengdu and Suzhou with a total gross floor area of 0.6 million square meters. These contributed P320 million or seven percent of the company’s aggregate earnings.

In terms of gross revenues, these four malls pumped in P1.27 billion, accounting for nine percent of total.

The SM China malls are enjoying healthy increases in rental rates and improvement in occupancy levels. The average occupancy rate for the four malls in China is now at 95 percent.

 “We are pleased to reach our targets for the first half of this year on the back of robust consumer spending and strong economic fundamentals. In line with this, we look forward to the second half of the year with more confidence in implementing our expansion plans, especially as we move towards the holiday season,” said SM Prime president Hans T. Sy.

Operating expenses likewise expanded 15 percent to P6.79 billion owing to higher administrative expenses particularly utilities, business taxes and manpower expenses.

SM Prime has 44 supermalls strategically located across the country with a total gross floor area of 5.3 million square meters.

Earlier this year, it opened SM City Olongapo in Zambales, SM City Consolacion in Cebu and SM City San Fernando in Pampanga. Three more malls are expected to open for the balance of the year -- SM City Gen. Santos in South Cotabato, SM City Lanang in Davao City and SM Chongqing in China.

By the end of the year, SM Prime will have 46 malls in the Philippines and five in China with an estimated combined gross floor area of 6.3 million square meters.