SM Prime income up 12% to P1.9 billion in third quarter

MANILA, Philippines - Shopping mall giant SM Prime Holdings Inc. posted a 12- percent growth in net income during the third quarter this year to P1.9 billion on higher lease revenues and improved consumer spending.

In a financial report submitted to securities regulators, SM Prime said net earnings for the nine months ending September this year rose 11 percent to P5.6 million as revenues went up 17 percent to P17 billion. In the third quarter, revenues hit P5.7 billion, 14 percent higher than the same period a year earlier.

“Our performance for the first nine months of 2010 remains on track, and in fact better than we earlier expected given a more robust consumer environment. The domestic economy displays strength and sustainable growth which fuels increased spending that flows into SM malls. We expect this trend to continue into the last quarter of the year, when the holiday season further boosts consumer spending,” SM Prime president Hans T. Sy said.

From January to September 2010, SM Prime’s consolidated rental revenues accounted for 84 percent or P14.3 billion of total revenues and represents an increase of 13 percent from the year ago level.

The increase came from both new space and same store rental growth of six percent. New rental space came from the malls that opened in 2009 namely, SM City Naga, SM City Rosario and SM Center Las Piñas, together with SM City Tarlac, which opened in April this year. In addition, expansion projects in SM North Edsa, SM City Fairview, and SM City Rosales also contributed to rental revenue growth. The new malls and expansions in 2009 and 2010 added 340,000 square meters (sqm) to the company’s total gross floor area (GFA) and presently register an average occupancy rate of 97 percent.

Cinema ticket sales reached P2 billion, 41 percent higher than the P1.4 billion recorded a year earlier.

In October 2010, SM Prime inaugurated three new malls: SM City Novaliches in Quezon City; and SM City San Pablo and SM City Calamba, both in the province of Laguna.