SM Prime Holdings Inc.’s (SMPH.PH) first-quarter revenue likely rose 20%-25% on year on the continued expansion of its shopping mall network, company executives said Monday.  SM Prime Executive Vice President Jeffrey Lim said preliminary figures showed 20%-25% on-year growth in revenue in the quarter ended March 31, while same-store sales were up 7% on year. 

Lim said the country’s largest mall operator by sales and assets has set an ‘earnings guidance’ of 12%-13% growth in net profit this year from PHP5.45 billion in 2006.  SM Prime now has 28 malls with a total leasable floor area of 3.6 million square meters, up from 23 malls in the first quarter of 2006 with a total area of about three million square meters. 

The average daily traffic at these malls was 2.5 million people in the first quarter from 2.06 million at the end of 2006.  During the meeting, SM Prime shareholders approved a plan to double the company’s authorized capital to PHP20 billion.  The company also declared a one-for-four stock dividend to cover the capital increase. 

A PHP0.27-a-share cash dividend, equivalent to 50% of last year’s net profit, was also declared. SM Prime President Hans Sy said the company has set aside PHP7 billion for capital spending this year, part of a PHP35-billion five-year budget to be spent on expansion. Sy added that the budget doesn’t include funds to be spent on land acquisition. 

‘There’s lot of opportunities outside Metro Manila,’ Sy said, citing the expansion of the business process outsourcing industry outside the capital as well as the rising spending power of people in the provinces due to the brisk deployment of Filipino workers overseas.

About 60% of SM Prime’s revenue comes from its malls in metropolitan Manila. The rest comes from malls in the provinces.  SM Prime is expected to decide later this year whether the company will absorb the operations of three malls in China owned by the Sy family, SM Prime’s majority shareholder, officials said. 

Lim said the capital increase was in preparation for new opportunities, but didn’t say if it was meant to create new shares for a possible swap with the China holdings of the Sy family.  ‘The SM group is in the final stages of what to do (with the China malls of the Sy family).

We should be able to come up with a firm decision in the second half,’ Sy said.  Out of the company’s PHP18 billion debt maturing between this year and 2016, PHP8 billion will mature in 2009. Lim said the amount could be refinanced either through straight debt or convertible bonds.  SM Prime is due to announce its first quarter performance in the next few weeks.