SM Prime posts P7.9B profit, up 12% Tuesday, February 15, 2011
Mall operator SM Prime Holdings Inc. yesterday said profit last year reached P7.9 billion, up 12 percent from the P7 billion recorded a year earlier.
Consolidated revenues reached P23.7 billion, up 15.6 percent from P20.5 billion.
EBITDA increased 14 percent to P15.9 billion, for an EBITDA margin of 67 percent.
"These results include the operations of the three SM malls in China, which are located in the cities of Xiamen and Jinjiang in Southern China, and Chengdu in Central China," the company said.
The Sy-led firm said its performance was largely aided by the "strong economic environment and the sustained high level of personal consumption expenditure" driven mainly by income earned by Filipinos abroad and election spending in the first half of the year.
Mall operations in China posted a 36 percent growth in combined gross revenues on the strength of China’s economy, an improvement in the malls’ occupancy rates, and the expansion of SM City Xiamen through its high-end Lifestyle Center.
"While I recognize that the past year’s out-performance was boosted by the buoyant economies of the Philippines and China, I would also like to recognize and congratulate the men and women who form part of the SM Prime organization," said Hans T. Sy, SM Prime president.
"Their hard work and dedication made it possible for the company to harness the potential that such optimism offered. Expansion targets were met and plans were executed well. As such, our malls continued to enjoy the unfailing, loyal support and patronage of our millions of customers to whom we express our sincere gratitude. We enter a new decade full of bigger goals and greater optimism supported by positive economic prospects and a strong and experienced organization," Sy added.
For 2010, SM Prime’s consolidated rental revenues contributed 84 percent to the total, and grew by 13 percent to P20.0 billion. The increase came from both new space and the same store rental growth of 6 percent.
New rental space came from malls that opened in 2010, namely, SM City Tarlac, SM City San Pablo, SM City Calamba, and SM City Novaliches. Combined, the new malls added 276,800 square meters to the company’s total gross floor area and currently register an average occupancy rate of 94 percent.
Cinema ticket sales from January to December 2010 surged 32 percent to P2.8 billion from P2.1 billion during the same period in 2009. The wider deployment and use of digital movie technology, the new IMAX Theater in SM North EDSA, and the renovation of SM cinemas increased SM Prime’s market share of local and foreign movies.
For 2011, SM Prime plans to open three new malls. These SM City Masinag in Antipolo City, SM City San Fernando in Pampanga and SM City Olongapo in Zambales. Part of the 2011 program is for SM Prime to also expand two of its existing malls, SM City Davao in Southern Mindanao and SM City Dasmariñas in Cavite.
SM Prime is eyeing to spend P20.1 billion as capital expenditures for the construction of malls both locally and abroad. SM Prime has allocated P9 billion for the construction of malls in Chongqing and Zibo and acquisition of a land in Tianjin.
SM Prime is also trying a new concept in its operation with the refurbishment of a public market in Dasmarinas, Cavite. Spending around P500 million, SM Prime is partnering with the local government of Dasmarinas to improve the public market and put up a full-scale public market on the two-hectare lot area of the old market.
To be called SM Place, it is eyed to be a shopping district with dozens of local growers, seafood merchants, fresh meat vendors, bakers and other businesses, SM said.
By the end of 2011, SM Prime will have 47 malls in the Philippines and in China with an estimated combined gross floor area of 5.7 million sq.m.