SM Prime Holdings Inc. said profits this year are poised to grow by double digits, as the Philippines’ largest mall developer and operator saw first-quarter revenues rising by a quarter.
Hans Sy, SM Prime president, said full-year earnings may grow by 12 percent to 13 percent, adding the company would ride on the business process outsourcing (BPO) industry’s expansion outside Metro Manila and put up more shopping centers.
Sy said the company is earmarking P35 billion in capital expenditures for the expansion of its existing malls and construction of new ones nationwide.
About half of the budget would be financed through internally generated funds, he said. With that amount, SM Prime expects to have 35 to 40 malls. Sy said SM Prime would be acquiring land in Metro Manila, but is not discounting potential sites outside the capital.
About 60 percent of SM Prime’s revenues come from its mall operations. With BPO firms moving out of Metro Manila to other provincial centers, the company may seize the opportunity of getting business out of the geographical expansion of the booming industry, Sy said.
“It depends really on the opportunity. Much of the locators have come to us showing interest in our provincial malls,�? he said. In addition, SM Prime may also tap the vast business potential of rising remittances from overseas Filipino workers (OFW) as people in the provinces now have the purchasing power on which the retail business depends.
The company is also on the look out for existing shopping centers to acquire in and outside the capital, Jeffrey C. Lim, SM Prime executive vice-president said, adding the company received a lot of offers from different groups.
SM Prime will spend P7 billion for a number of projects to include the construction of a planetarium within a science museum inside the SM Mall of Asia in Pasay City, and the expansion of the SM North Edsa.
The development of the 3,000-square-meter museum and planetarium would cost P250 million, and would tap the expertise of a foreign group that developed similar facilities in the US. SM Prime expects to complete the educational facility by the end of this year.
SM North Edsa is undergoing expansion at a cost of P1.8 billion, with the company poised to demolish the existing Annex building to give way to a bigger facility. For next year, the company will open new malls in the cities of Tarlac, Naga, Calamba, Baliwag and Marikina.