Rental revenue lifts SM Prime's profit by 70%

SM Prime Holdings, Inc. (SM Prime), the Philippines’ leading integrated property company, booked a whopping 70-percent surge in profit in the first nine months of 2015 on the back of the growth in rental revenues.

Its consolidated net income reached P22.9 billion in January to September from P13.47 billion during the same period last year.

This was inclusive of the P7.4-billion one-time trading gains on marketable securities booked in the first quarter of the year.

On a recurring basis, net income surged by 15 percent to P15.5 billion in the first nine months.

Consolidated revenues rose nine percent to P52.2 billion after third-quarter earnings reached P16.2 billion.

“SM Prime’s expansion across all its various business portfolios since 2013 has driven its strong financial performance this year. We expect SM Prime’s growth to be sustained as we continue to increase our mall footprint by 13 percent this year. We are excited to launch SM Seaside Cebu later this year, a landmark project in the Visayas region. We see Metro Cebu as one of our important growth corridors following our growth track in Metro Manila,” SM Prime President Hans T. Sy said.

Rental revenues from retail and commercial spaces, which contributed 56 percent to the consolidated revenues, increased by 11 percent to P29.4 billion from P26.4 billion.

The growth in rental revenues was mainly driven by rising contribution from the new malls and the expansion of shopping spaces in existing malls in 2013 and 2014.

SM Prime’s real estate sales, which account for 32 percent of the consolidated revenues, grew by 4 percent to P16.6 billion, mainly due to higher sales take-up and construction accomplishment of SMDC projects.

It maintained a total of 52 malls in the Philippines and six malls in China in the first nine months with total retail space of 7.6 million square meters.

SM Prime is set to open its regional landmark, SM Seaside City Cebu, later this month. It is also expanding two existing malls --SM City Lipa in Batangas and SM City Iloilo.

By the end of 2015, SM Prime will have 55 malls in the Philippines and six malls in China with an estimated combined GFA of 8.3 million sqm.

It currently has 27 residential projects in the market, 25 of which are in Metro Manila and two in Tagaytay.

Meanwhile, the Commercial Properties Group has five office buildings with an estimated gross floor area of 318,000 square meters. Five E-com Center will be formally launched this month.

- Interaksyon

8 Philippine companies make it to Forbes' list of top global firms

The listed holding company of the country's richest man is the top-ranking Philippine firm in Forbes' list of the world's biggest public corporations.

SM Investments Corporation, which earns its keep from banking, property and retail, landed in the top 1,000 at 911th place among the world's top 2,000 publicly-listed firms. Joining SM were two Ayala-owned firms (BPI and Ayala Corporation), two companies chaired by businessman Manuel V. Pangilinan (PLDT and Meralco), George Ty-owned Metrobank, John Gokongwei's JG Summit and Top Frontier Investment Holdings Inc, which is owned by San Miguel Corporation.

Here are the screen grabs of Forbes' profiles on the eight companies:









- Interaksyon

SM open to partnering with San Miguel for alternative to NAIA

Henry Sy's listed holding firm is open to partnering with San Miguel Corp (SMC) for a proposed $10-billion international airport south of Manila.

"We can talk," SM Investments Corp chief financial officer Jose Sio told reporters Monday during the listing of the conglomerate's P15-billion fixed-rate retail bonds at the Philippine Dealing and Exchange Corp.

Last week, SMC president Ramon S. Ang named Filipino conglomerates such as the SM and Ayala groups as possible partners for the airport project. He said the diversified conglomerate was willing to go through bidding for the development.

Sio said there are no discussions with San Miguel, but a possible tie-up with the diversified conglomerate will be good "not [only] for business" but "for country” as well.

"That’s what we need for our country to grow in the next stage, we have to improve our infrastructure. That is very important," he said.

Last week, Ang presented to the government a proposal to construct an international airport that will be located along the Manila-Cavite Coastal Road at the waterfront reclamation project covering the cities of Paranaque and Las Pinas.

The proposed airport, which would be pursued as a build-operate-transfer (BOT) project, would be located on newly reclaimed land reaching 1,600 hectares. Once built, the new airport can accommodate all international and domestic operations at the Ninoy Aquino International Airport (NAIA).

The new airport is near Manila Bay where the SM group, through SM Land Inc, and the Pasay City government are planning a P54.5-billion reclamation project. The Philippine Reclamation Authority is bidding out the right to reclaim the project.

“We’re laying the ground work for the next stage of Philippine economic growth. After the upgrade, we expect we will enter the second stage of development,” Sio said.

SM is in the business of retail, mall operations and development, financial services, residential and property development, hotel and convention centers, and gaming. Aside from its core businesses, the group also has interests in mining, infrastructure, and geothermal energy.

SM suffered a 16-percent drop in earnings to P6.23 billion in the first quarter from P7.42 billion a year ago in the absence of hefty trading gains.

Despite the weakness in the first three months of the year, the conglomerate will end the year with a single-digit increase in net profit, as BDO posts higher interest income and significant loan growth, Sio said in a previous interview.

 

- Interaksyon