New malls boost SM Prime revenue
SM Prime Holdings has posted a 90 per cent increase in first half year sales to PHP18.7 billion (US$408 million).
However the increase was largely due to one time gains on the sale of securities; recurring income grew by a more modest, but still healthy, 15 per cent.
The company says new malls helped boost its turnover.
Rental revenues from retail and commercial spaces, accounted for 54.2 per cent of consolidated revenue, up 10 per cent. 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. These include SM Aura Premier, SM City BF Parañaque, Mega Fashion Hall in SM Megamall, SM City Cauayan, SM Center Angono and the expansion of SM City Bacolod with a total gross floor area of 652,000 sqm.
In the first half of the 2015, SM Prime opened SM Megacenter Cabanatuan and SM City San Mateo last April and May, respectively, taking the total Philippine operating malls to 52 with a GFA of almost 6.6 million sqm. For the rest of the year, SM Prime is set to open one mall in Metro Manila, SM Center Sangandaan in Caloocan, and two malls outside Metro Manila namely SM City Cabanatuan in Nueva Ecija, and SM Seaside City Cebu.
The company is also expanding two existing malls, SM City Lipa in Batangas and SM City Iloilo. Combined, these new and expanded malls will have a total GFA of almost 716,000 sqm. By the end of 2015, SM Prime will have 55 malls in the Philippines and six malls in China with an estimated combined GFA of 8.3 million sqm.
Cinema and event ticket sales, accounted for 6.6 per cent of consolidated revenues, recovered in the second quarter registering a seven per cent year-on-year increase to PHP1.4 billion as compared to a decline year-on-year of eight per cent to almost PHP1 billion the previous quarter. This brought cinema and event ticket sales to an almost flat point when compared with the same period last year.
The recovery of ticket sales in the second quarter was due to Hollywood blockbusters like Avengers – Age of Ultron, Fast and Furious 7 and Jurassic World.
“The strong financial performance posted by SM Prime in the first half of the year is reflective of the benefits derived from a diversified property portfolio as both rental and developmental incomes contributed to the overall performance of the company,” said SM Prime president Hans T. Sy.
“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.”