SM Prime Holdings Inc. (SM Prime) closed yesterday up P0.85 to P34.60 per share. With an outstanding shares of 28.88 billion, the company ended yesterday’s trade a few pesos shy of P1 trillion in capitalization.
The company attributed the feat to favorable market outlook.
“This makes SM Prime the first Philippine company to reach this milestone in the market,” the company said in a statement.
“SM Prime acknowledges the investment community’s unwavering support. This is a great moment for us to share this success as we continue to deliver our commitment to our shareholders,” said John Ong, SM Prime chief finance officer.
SM Prime attributed its success is to the integration of all the property businesses under SM Prime in 2013.
“The strategic move of SM Group enabled SM Prime to realize synergies among its business units, increasing efficiencies in operations and revenue in enhanced shareholder value. It also allowed SM Prime to pursue larger projects, from reclaiming
land to long-term integrated developments,” SM Prime said.
The company said it remains committed to its “role as a catalyst for economic growth, delivering innovative and sustainable lifestyle cities that enrich the quality of life of millions.”
The company recently issued a P20-billion seven-year bond to finance its expansion. It pegged the bonds’ coupon at 5.1683 percent.
Forming the company’s Series-G bond, the bonds were issued at a principal amount of P15 billion and another P5 billion to cover oversubscription.
“The proceeds of the retail bonds will enable SM Prime to pursue our expansions of mall and residential businesses, which are the growth drivers of the company,” said Jeffrey Lim, SM Prime president.
This issuance of SM Prime bonds due 2024 is the fourth offering of peso-denominated retail bonds to the public.
The company in April said capital spending for the next two years may reach P50 billion to drive its growth target set three years ago.
“SM Prime will continue to expand its mall and residential businesses which are the major revenue drivers. We will further reach out to provincial cities as an integrated property developer and as a strategic partner, given the tremendous opportunities
in light of higher government spending on infrastructure development across the country,” said Lim, as the company noted that 80 percent of the amount will be spent on project developments, mostly for mall and residential development.
The remainder will be used for land banking.
SM Prime’s five-year plan calls for the 10.96 million square meters of gross leaseable mall space out of 74 malls in the Philippines and 11 China-based malls; a total of 139,628 units of launched residential units; 460,000 sq.m., of leaseable office
space out of 7 office buildings; and 2,187 hotel rooms.
SM Prime also aims to double its profit and revenues from 2013’s P16.27 billion and P32.2 billion, respectively.
The company in May said first quarter profit reached P6.6 billion, up 13 percent from P5.8 billion last year.
Consolidated revenues reached P20.5 billion, up 12 percent from the prior year’s P18.2 billion.
“Overall operating income increased by 14 percent to P9.6 billion from P8.4 billion in the same period,” SM Prime said.
The company said the growth was largely due to rental revenues from mall expansions in the past two years as well as higher real estate sales and construction accomplishments of residential projects since 2014.