SM Development Corp. (SMDC), the property arm of the SM Group of Companies, reported a significantly lower net income for the first six months of the year on “unrealized mark-to-market loss on investments held for trading.

The company said in a disclosure that its profits dropped to P118.8 million from P354.7 million despite higher revenues of P806.2 million for the year’s first semester from P317.9 million in 2005.

“Noteworthy performance in real-estate operations contributed to the increase in realized gross profit by 482 percent to P85.4 million from 2005’s P14.7 million as completion rate of Chateau Elysee-Cluster 2 reached 100 percent. Sales from real estate, cost of sales and unrealized gross profit grew by 153.6 percent, 79.1 percent and 258.1 percent, due to the outstanding preselling of Mezza Residences, the company said.

Operating expenses also climbed to P38.4 million from P20.6 million.

“The higher in operating expenses was primarily due to the rise in salaries and wages, increase in manpower complement and increase in marketing expenses from the aggressive selling of the company’s continuing projects, SMDC said