SM Prime nets P16.27B in 2013

MANILA, Philippines - SM Prime Holdings Inc., the property arm of retail tycoon Henry Sy, reported flat earnings last year to P16.27 billion due to one-time costs of consolidation.

Sy merged his property firms (SM Development Corp., Highlands, SM Land) and other real estate assets under SM Prime last year.

SM Prime’s consolidated net income would have grown eight percent to P17.55 billion without the one-time restructuring cost of P1.28 billion.

This was the first time SM Prime reported the consolidated financial performance of its mall, residential, office and tourism development businesses.

Consolidated revenues went up five percent to P59.79 billion, 54 percent or P32.2 billion of which came from lease operations.

Rental revenues rose 11 percent to P32.2 billion, largely due to the full year effect of new malls that opened in 2012 and 2013 namely

SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier, and SM Aura.

Excluding the new malls and expansion of existing ones, lease revenues increased by seven percent.

The group’s operations in China sustained its positive growth, chalking up a net income of P958 million in 2013.

Cinema ticket sales grew eight percent to P3.74 billion while amusement and other revenues jumped by 40 percent to P3.08 billion.

The full-year recognition of revenues from Two-Ecom, which began operations in mid-2012 and is now 98 percent occupied, helped push up rental revenues from commercial operations by 14 percent to P2.93 billion.

Real estate sales, on the other hand, fell 7.9 percent to P20.78 billion.

Among the projects launched last year include Grass phase 2, Shore and Trees, both are expected to contribute significantly to the group’s total revenues in 2014.

“Our consolidated financial results in 2013 were within our expectations. We expect the Philippine economy to sustain its growth momentum in 2014 and create more demand for our property offerings. We will continue to pursue our expansion plans and look for new growth opportunities. We sincerely thank our stakeholders for believing in our vision of becoming a world-class Filipino brand,” said SM Prime President Hans T. Sy.

SM Prime has set aside P36 billion for capital expenditures this year, 85 percent of which will go to the construction of new malls and the expansion of existing ones. The rest of the budget will go to malls in China.