THE Philippines’ largest mall owner and operator announced that its first-quarter profit rose at a slower pace this year. 

In a statement, SM Prime Holdings (SMPH) said its net income in the first three months this year grew by 7 percent to P1.6 billion.

This was slower than the 11-percent expansion seen in the same period last year. 

“SM Prime continued to exhibit growth in the first quarter amid a more challenging environment. As such, we are moving ahead with our expansion program as planned.�? Hans T. Sy, SMPH president, said. 

Gross revenues rose by 8 percent to P3.8 billion mainly due to higher rental revenues as the company added three new malls that opened last year.

These were SM City Bacolod, SM City Taytay and SM Supercenter Muntinlupa. 

With this, rentals from all the malls—which comprise 85 percent of total revenues—grew by 10 percent to P3.3 billion while same store rental rose by 5 percent despite the on-going redevelopment plan in SM Megamall and SM North Edsa.

Last year, gross rental revenues had grown 26 percent, while same store rentals increased 7 percent. 

Cinema ticket sales this year were flat, as against last year’s 19 percent expansion.

The company blamed this year’s weak performance on the absence of blockbuster movies. 

Due to the new malls, operating expenses increased by 6 percent to P1.6 billion, while operating income grew by 9 percent to P2.2 billion due to cost cutting measures. 

The company is set to open SM City Marikina in Metro Manila, SM City Baliuag in Bulacan, and SM Supercenter Rosales in Pangasinan, increasing the total number of malls to 33.

At the same time, the company is expanding SM Megamall and SM City Fairview.

By year-end total gross floor area will reach 4.2 million square meters.