By: Zinnia B. Dela Peña

MANILA, Philippines – Shopping mall giant SM Prime Holdings Inc. managed to post a seven-percent increase in profit last year despite a slowing economy and tougher business environment.

In a statement, SM Prime said its consolidated net income reached P6.4 billion in 2008 from P6 billion in 2007 as revenues expanded 12 percent with its acquisition of three Sy family-owned SM malls in China.

Last year’s revenues amounted to P17.8 billion while EBITDA (earnings before interest, taxes, depreciation and amortization) stood at P12.3 billion or an increase of nine percent from the year-ago level. Income from operations went up nine percent to P9.6 billion.

“Notwithstanding the global financial situation, SM Prime achieved its goals and sustained its expansion in 2008. The company performed fairly well and was able to deliver on its targets and objectives due mainly to the unwavering support of its loyal customers, tenants, suppliers, shareholders and employees,” said Hans Sy, president of SM Prime.

Rental fees continued to account for the biggest chunk of SM Prime’s total revenues, reaching P15.4 billion or 15 percent more from the previous year. Bulk of the increase came from additional space in new malls and mall expansions.

Among the new malls that opened last year include SM City Marikina, SM City Rosales and SM City Baliwag. Also opened was The Annex, an expansion phase at SM City North Edsa, and The Atrium at SM Megamall.

These new malls and expansions boosted SM Prime’s total gross floor area by nine percent or 353,000 square meters to a total of 4.3 million square meters.

The average occupancy rate of the new malls now stands at 93 percent, SM Prime said.

Cinema ticket sales, on the other hand, were flat.

Meanwhile, operating expenses rose 15 percent to P8.2 billion mainly due to the new and expanded malls.

For this year, SM Prime plans to open SM City Naga in Camarines Sur, SM City Rosario in Cavite, SM City Pamplona in Las Piñas, and the Sky Garden at SM City North Edsa. It is also set to expand SM City Rosales in Pangasinan.

SM Prime expects to end 2009 with a total 36 malls nationwide. Its SM China malls are located in the cities of Xiamen and Jinjiang in Southern China, and Chengdu in Central China.