SM Prime Net Income Hits PhP7.9B

SM Prime Holdings Inc. (PSE: SMPH), the Philippines’ dominant shopping mall developer and operator, reported a 12% growth in consolidated net income to PhP7.9 billion from full-year 2010, as compared to PhP7 billion during the same period in 2009. Revenues for the period rose by 16% to PhP23.7 billion. EBITDA increased 14% to PhP15.9 billion, for an EBITDA 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.

SM Prime’s 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. Meanwhile, SM Prime’s operations in China posted 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.

SM Prime President Hans T. Sy said, “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. 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.”

For full year 2010, SM Prime’s consolidated rental revenues contributed 84% to the total, and grew by 13% to PhP20 billion. The increase came from both new space and the same store rental growth of 6%. 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. Combined, the new malls added 276,800 square meters (sqm) to the company’s total gross floor area (GFA) and presently register an average occupancy rate of 94%.

Cinema ticket sales from January to December 2010 surged 32% to PhP2.8 billion from PhP2.1 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.

For 2011, SM Prime plans to open three new malls: SM City Masinag in Antipolo City, SM City San Fernando in Pampanga and SM City Olongapo in Zambales. Part of the 2011 program is for SM Prime to 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 sqm.

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