MANILA, Philippines — SM Prime Holdings, Inc., the Philippines’ dominant shopping mall developer and operator, registered a better than expected 14 percent increase in net income for the first half of 2011 to P4.27 billion from P3.76 billion in the same period last year.

The firm said in a disclosure to the Philippine Stock Exchange that revenues reached P12.71 billion, for a 12 percent increase, year-on-year, While EBITDA (earnings before interest, taxes, depreciation and amortization) for the period was at P8.68 billion, for an increase of 12 percent and an EBITDA margin of 68 percent.

SM Prime said better growth resulted from the opening of new Philippine malls in 2010, same store sales growth of 7 percent, much improved performance in SM’s China malls and lower borrowing cost.

The latter is a result of lower interest rates and debt management initiative which includes the prepayment of higher interest-bearing loans through refinancing that also lengthened the maturity of the company’s loans.

“For the first half of this year, SM Prime exceeded expectations by continuing to implement its proven business model which focuses on building long-term tenant relationships and effective innovation,” said SM Prime president Hans T. Sy.

He added that ‘this is further supported by a capable organization that is firmly committed to satisfy the various requirements of our millions of loyal customers.

First half rental revenues grew 15 percent to P10.92 billion, as compared to P9.49 billion during the same period last year due to healthy consumer spending and additional rental space from the opening of new SM malls in 2010.

Cinema ticket sales dipped to P1.30 billion, compared to P1.37 billion during the same period last year due to a low turnout of blockbuster movies during the period. In terms of gross revenues, the three malls in China contributed P0.98 billion for the first half, or 8 percent of total consolidated revenues. In terms of net income, the three malls contributed P0.21 billion for the six-month period, or 5 percent of total consolidated net income.

The SM China malls are enjoying healthy increases in rental rates, and much higher occupancy levels, particularly in SM Xiamen’s Lifestyle Center and SM Chengdu.

Rental revenues grew sharply by 57 percent to P0.95 billion. The average occupancy rate for the three malls in China is now at 91 percent.