SM Prime net income up 8% to P2.41B in H1

Mall giant SM Prime Holdings Inc. of retail tycoon Henry Sy continued to post steady growth as its net profit went up by eight percent to P2.41 billion in the first six months of this year, mainly due to higher rental revenues.

In a statement issued yesterday, SM Prime said its net earnings amounted to P1.17 billion during the second quarter period, 10 percent higher than the year-ago level of P1.07 billion.

Rental income from leases in the malls and food courts remained the major driver of growth, posting a 12 percent increase to P4.29 billion in the first half this year. This was due to the opening of two SM Supermalls in 2004, the SM City Dasmariñas and SM City Batangas. The occupancy level for both malls is now at 97 percent.

Gross revenues improved by six percent to P5.19 billion from P4.92 billion even as expenses that grew eight percent due to the opening of the two new malls.

Operating expenses went up to P2.21 billion from P2.05 billion in 2004.

SM Prime said it is confident it can sustain its gains for the rest of the year with the expected opening of three new malls. Last July 15, SM Prime opened its 20th mall, SM City San Lazaro in Manila.

Others slated for opening this year include SM Valenzuela, which is due in October; SM Molino, opening in November; and the SM Mall of Asia, opening in December.

The Mall of Asia is envisioned as the country’s premier shopping destination and tourist attraction revitalizing the Manila Bay area.

This year, SM Prime has earmarked P5 billion for the construction of new malls and acquisition of real estate properties for future expansion. Funding will be derived from internally-generated cash but the company may tap borrowings.

With a total landbank of 173 hectares in prime locations, SM Prime is set for continuous expansion within the next five years.