Pasay–(PHStocks)–SM Prime Holdings Inc. (PSE: SMPH), the Philippines’ dominant shopping mall developer and operator, exceeded its 2011 profit growth target by attaining a 15% increase in consolidated net income to PhP9.1 billion for the full year, as compared to PhP7.9 billion in 2010. Total revenues for the year rose by 13% to PhP26.9 billion. EBITDA increased 16% to PhP18.5 billion, for an EBITDA margin of 69%. These results include the operations of the four SM malls in China, which are located in the cities of Xiamen and Jinjiang in Southern China, Chengdu in Central China, and Suzhou in Eastern China.
SM Prime’s better than expected performance was brought about by a mix of expanded capacity from new malls in the Philippines that opened in 2010 and 2011, and very healthy same-store rental growth of 7%. In addition, SM Prime’s four shopping malls in China sustained their robust growth, with net income doubling to PhP889.0 million in 2011, from PhP428.0 million in 2010. A tighter grip on operating expenses through the use of innovative energy conservation methods likewise contributed to the company’s rise in profits.
SM Prime President Hans T. Sy said, “SM Prime’s noteworthy performance in 2011, which was achieved in spite of tempered economic progress, clearly shows that the business formula the company has adopted is resilient and built for sustainable growth. Now that there is better optimism on the country’s prospects, the company is even more eager to pursue its growth and expansion plans, as a fitting tribute to all our stakeholders, who we sincerely thank for loyally supporting us all through these years.”
For full year 2011, SM Prime’s consolidated rental revenues contributed 85% to the total, and grew by 14% to PhP22.8 billion. New rental space came from SM City Tarlac, SM City San Pablo, SM City Calamba, SM City Novaliches and SM City Masinag. Combined, the new malls added 380,000 square meters (sqm) to the company’s total gross floor area (GFA) and presently register an average occupancy rate of 97%.
Cinema ticket sales from January to December 2011 increased by 10% due to popular movies shown during the period. The major blockbusters were “Transformers 3: Dark of the Moon”, “Praybeyt Benjamin”, “Harry Potter and the Deathly Hallows Part 2”, “No other Woman”, and “Twilight Saga: Breaking Dawn Part 1”.
Last week, SM Prime inaugurated SM City Olongapo, its first mall in the province of Zambales. For the rest of 2012, SM Prime is scheduled to open SM City Lanang in Davao City, SM City General Santos in Southern Mindanao, SM City Consolacion in Cebu, SM City San Fernando in Pampanga, and SM Chongqing in China.
SM Prime is focused on developing malls in provincial areas of the Philippines, where it aims to open three to four malls every year. In China, the company will continue to open one mall per year, with increased momentum by 2014, when it is scheduled to open its 540,000-sqm mall in Tianjin.
By the end of this year, SM Prime will have 46 malls in the Philippines and five in China with an estimated combined GFA of 6.3 million sqm.