Rentals revenues drive SM Prime's 1st-quarter profit

Rentals revenues drive
SM Prime’s 1st-quarter profit

RIDING on the back of higher gross revenues and minimal operating expenses, mall operator SM Prime Holdings Inc. (SMPI) reported Monday an 8-percent increase in net income for the first quarter of 2006 to P1.34 billion compared to P1.24 billion in the same period last year.
       In a statement, the company said the income growth was buoyed by the 15-percent increase in gross revenues from January to March to P2.85 billion from P2.49 billion in the same period 2005.
       “Rental revenues remain the largest portion, with a similar growth of 15 percent amounting to P2.35 billion from last year’s P2.04 billion. This is largely due to rentals from new SM Supermalls opened in the second half of 2005 and 2006, namely, SM City San Lazaro, SM Supercenter Valenzuela, SM Supercenter Molino and SM City Sta. Rosa,” it said.
       These new malls currently have an average occupancy level of 95 percent.
       Cinema ticket sales, on the other hand, showed a strong performance, increasing by 20-percent due to screening of more blockbuster films in 2006 compared to the same period in 2005 and the huge success of last year’s Metro Manila Film Festival.
       Meanwhile, income from operations enjoyed a significant growth of 22 percent from P1.40 billion in 2005 to P1.71 billion in 2006. Operating expenses exhibited a minimal increase of 6-percent due to the company’s efforts at maintaining operational efficiency.
 
Full-year target
       FOR the full year, the Henry Sy-controlled SMPH is targeting to record a net profit of P5.4 billion, 8-percent higher than the P4.9 billion it posted in 2005.
       Company vice president for finance and administration Jeffrey C. Lim said the projected increase would be boosted by the new malls that will open this year, particularly The Mall of Asia in Pasay City. Opening on May 21, The Mall of Asia is touted to be the largest shopping mall in the Philippines and one of the largest in the region.
       Apart from the Mall of Asia, the company is also set to open this month the SM City Clark, Pampanga; the SM Supercenter Frontera Verde on C-5 Road in Pasig City; and the SM City Lipa, Batangas.
       The company also has plans to build an SM Supermall in Bacolod City, Negros Occidental.
       The company has also reserved 118.7 hectares for development in 14 locations, including Marikina, Parañaque, Muntinlupa, Bulacan, Tarlac, Laguna and Pangasinan.
       SM Prime said it intends to build at least four to five malls annually for the next three years.
       It shares rose 11 percent to P9 on Monday. Honey Madrilejos-Reyes

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