Source: BusinessWorld
PROFITS OF SM Prime Holdings, Inc., the country’s largest shopping mall operator, grew faster last year, exceeding analysts’ expectations amid higher consumer spending.
In a statement, the Sy-led firm said consolidated net income grew by more than 12% to P7.9 billion, from P7 billion in 2009.
Revenues rose by 16% to P23.7 billion. Earnings before interest, taxes, depreciation and amortization or EBITDA increased by 14% to P15.9 billion, or margin of 67%.
“These results include the operations of the three SM malls in China, which are located in the cities of Xiamen and Jinjiang in Southern China, and Chengdu in Central China,” the listed firm said.
SM Prime said its 2010 performance was “largely aided by the strong economic environment and the sustained high level of personal consumption expenditure driven mainly by income earned by Filipinos abroad and election spending in the first half of the year.”
Operations in China saw a “robust” 36% growth in combined gross revenues on the “strength of China’s economy, an improvement in the malls’ occupancy rates, and the expansion of SM City Xiamen through its high-end Lifestyle Center.”
“While I recognize that the past year’s outperformance was boosted by the buoyant economies of the Philippines and China, I would also like to recognize and congratulate the men and women who form part of the SM Prime organization. Their hard work and dedication made it possible for the company to harness the potential that such optimism offered.
Expansion targets were met and plans were executed well,” SM Prime President Hans T. Sy said in the statement.
“As such, our malls continued to enjoy the unfailing, loyal support and patronage of our millions of customers to whom we express our sincere gratitude. We enter a new decade full of bigger goals and greater optimism supported by positive economic prospects and a strong and experienced organization,” he added.
Consolidated rental revenues accounted for 84% to the total, higher by 13% to P20 billion. The increase came from both new space and same-store rental growth of 6%, the firm said. New rental space came from malls that opened in 2010, namely, SM City Tarlac, SM City San Pablo, SM City Calamba, and SM City Novaliches.
The new malls added 276,800 square meters (sq. m.) to the company’s total gross floor area (GFA). The average occupancy rate was 94%.
Meanwhile, cinema ticket sales from January to December 2010 surged by 32% to P2.8 billion from P2.1 billion during the same period in 2009.
“The wider deployment and use of digital movie technology, the new IMAX Theater in SM North EDSA, and the renovation of SM cinemas increased SM Prime’s market share of local and foreign movies,” the statement said.
SM Prime cited “hit movies” last year including Twilight Saga: Eclipse, Iron Man 2, Avatar, Clash of the Titans, and Harry Potter and the Deathly Hallows.
SM Prime plans to open three new malls this year. Scheduled to open are SM City Masinag in Antipolo City, SM City San Fernando in Pampanga and SM City Olongapo in Zambales.
The firm will also expand two of its existing malls, namely, SM City Davao in Southern Mindanao and SM City Dasmariñas in Cavite.
By the end of 2011, SM Prime will have 47 malls in the Philippines and in China with an estimated combined GFA of 5.7 million sq. m.
SM Prime shares gained 2.88% or P0.30 yesterday to close at P10.70 apiece.
-- VJJ with inputs from Reuters