SM Prime’s first half profit surges 90% on trading gains

Property giant SM Prime Holdings Inc. almost doubled its net income in the first half after posting gains from selling securities. 

 

The company’s net income ballooned by 90 percent to P18.7 billion from P9.6 billion in the same period in 2014, according to a disclosure with the Philippine Stock Exchange on Monday.

 

Excluding the one-time trading gains, the recurring income of SM Prime increased by 15 percent year over year to P11.2 billion during the first six months of the year. 

 

"The sustained growth could be attributed to the consolidation of SM Prime, which resulted to a strong balance sheet that allowed us to pursue all projects as planned. We are confident that we can sustain this growth in the long-term,” President Hans Sy said.

 

The company generated P35.9 billion in revenues, an 8 percent increase from last year’s P33.3 billion mainly due to the continued growth in rental income and higher revenue recognition on completed real estate projects.

 

Of the amount, rental revenues from retail and commercial spaces accounted for 54.2 percent. The segment raked in P19.4 billion or 10 percent higher than last year’s P17.7 billion.

 

"The growth in rental revenues was mainly driven by rising contribution from the new malls and the expansion of shopping spaces in existing malls in 2013 and 2014,” SM Prime said. 

 

The company also attributed its higher income to the expansion of its office space portfolio with the addition of the recently launched SM Cyberwest in Queen City and the FiveE-com Center in Pasay City. 

 

Income from same-store rental continued to contribute 7 percent of the consolidated revenues, sustaining the growth posted in 2014.

 

Meanwhile, SM Prime booked a 3 percent increase in real estate sales totaling P12.3 billion from P11.9 billion. This amount represented 34.2 percent of the company's total revenues as of end-June.

 

"This allowed the group to post an 8 percent increase in net income to P3.0 billion. Growth was primarily due to the increase in the sales take-up and higher construction accomplishment of projects launched in 2010 to 2013,” SM Prime said. 

 

The housing group’s reservation sales rose 24 percent to 6,868 units. This translates to a 28 percent increase in value to P18.8 billion from P14.7 billion.

 

The 1 percent decline of costs incurred in the real estate segment to P6.7 billion from P6.8 billion boosted the gross profit margin of the company to 46 percent from 43 percent. 

 

Meanwhile, cinema and event ticket sales increased by 7 percent to P1.4 billion due to Hollywood movies like “Avengers — Age of Ultron,” “Fast and Furious” and “Jurassic World.”

 

The second-quarter result effectively made up for the 8 percent decrease in the previous quarter to bring year-to-date cinema and ticket sales to P2.4 billion or almost the same from a year earlier.  — ELR, GMA News