SM Prime Holdings Inc. (SMPH), the Philippines’ largest mall operator, said its second quarter earnings rose after it opened new shopping centers and retail activity defied market expectations.

From April to June this year, SMPH’s net income improved eight percent to P1.7 billion. Similarly, for the first half, its bottomline increased at the same pace to P3.4 billion.

Consolidated revenues reached P9.6 billion for the first six months, 15 percent higher than the P8.4 billion reported during the same period last year.

Consolidated rental revenues continued to contribute the biggest share to total revenues, hitting P8.4 billion, 17 percent higher than last year’s P7.2 billion.

Besides an active retail environment, growth drivers include added space brought about by the launch of new malls last year such as SM City Marikina, SM City Rosales, and SM City Baliwag, together with SM City Naga, which opened May this year.

Expansion projects in SM North EDSA, SM Megamall, and SM Fairview also contributed to rental revenue growth.

New malls and expansions in 2008 and 2009 added 477,000 square meters (sqm) to the company’s total gross floor area (GFA) and currently register an average occupancy rate of 96 percent.

Meanwhile, due to an increase in the number of blockbuster movies shown this year, cinema ticket sales from January to June 2009 grew five percent to P930 million from P890 million during the same period in 2008.

Operating expenses during the first six months of 2009 increased by 20 percent to P4.5 billion from P3.8 billion due largely to the new malls opened.

Income from operations increased to P5.1 billion, up 12 percent from P4.6 billion.

In terms of gross revenues, the three malls in China contributed P500 million for the six months ended June 30, 2009, or five percent of total consolidated operating revenues.

In terms of net income, the three malls in China contributed P60 million for the six months or two percent of the total consolidated income.

Major tenants in the company’s China malls include US retail giant Walmart, SM-Laiya Department Store, apparel retailer Giordano, health and beauty store chain Watsons, and international quick service restaurants McDonald’s and KFC, among others.

SMPH’s “[financial] results reinforce [the company’s] belief in the resilience of the Philippine economy,’ company president Hans T. Sy said. “We remain steadfast in pursuing our growth and expansion programs in order to better serve our millions of loyal customers.’

SM Prime will be opening later year SM City Rosario in Cavite, and SM Supercenter Pamplona in Las Piñas.

By yearend, SM Prime expects to have 36 malls in the country, with an estimated GFA of 4.9 million sqm.

On Thursday SM Prime’s shares closed nearly 2.1-percent higher at P9.80 each.