(24 February 2014. Pasay City, Philippines.) SM Prime Holdings, Inc. (SM Prime), one of the leading property developers in Southeast Asia, reported combined net earnings of Php16.27 billion in 2013.
Consolidated revenues rose 5% to Php59.79 billion from Php57.22 billion a year ago. Rental revenues accounted for 54% of the total, and grew by 11% to Php32.20 billion from Php28.95 billion in 2012.
The increase was primarily due to the full-year effect of new malls opened in 2012, namely SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier, and the opening in 2013 of SM Aura Premier. Excluding the new malls and expansions, rental revenues grew 7%. SM Prime’s shopping malls in China also sustained their profit growth, with net income amounting to Php958 million.
Cinema ticket sales increased by 8% to Php3.74 billion from Php3.48 billion in 2012, as SM Prime opened additional digital cinemas at the new malls. This allowed simultaneous nationwide releases and more blockbuster movies screened, both local and international.
Amusement and other revenues likewise increased by 40% to Php3.08 billion from Php2.21 billion in 2012. The increase was mainly due to opening of new amusement rides in SM by the Bay and the SkyRanch in Tagaytay, as well as the increase in advertising income and sponsorship revenues.
The full-year recognition of revenues from Two-Ecom, which began operations in mid-2012 and is now 98%-occupied, also helped push up rental revenues from commercial operations by 14% to Php2.93 billion.
Real estate sales for 2013 stood at Php20.78 billion. Three projects were launched in 2013, namely: Grass Phase 2, Shore and Trees. These projects are expected to contribute significantly to revenues starting in 2014. Gross margins improved to 42% versus 37% in 2012.
“Our consolidated financial results in 2013 were within our expectations. We expect the Philippine economy to sustain its growth momentum in 2014 and create more demand for our property offerings. We will continue to pursue our expansion plans and look for new
growth opportunities. We sincerely thank our stakeholders for believing in our vision of becoming a world-class Filipino brand,” said SM Prime President Mr. Hans T. Sy.
Consolidated operating expenses increased by 12% to Php23.72 billion in 2013 while consolidated costs of real estate was at Php11.94 billion, a 15% decrease from Php14.02 billion in 2012.
In May 2013, SM initiated a corporate restructuring exercise to consolidate the SM Group’s property companies and real estate assets under SM Prime. The reorganization paved the way for the delisting of shares of SM Development Corp. and Highlands Prime Inc., the merger of SM Land and SM Prime with the latter as the surviving entity, and the injection of the SM group’s real estate assets and shares in property companies into the mall developer.
On October 10, 2013, the Philippine Securities and Exchange Commission (SEC) approved the reorganization.
SM Prime’s consolidated net income in 2013 would have increased by 8% to Php17.55 billion were it not for the one-time restructuring cost of Php1.28 billion. This was the first time the holding firm reported the consolidated financial performance of its mall, residential, office and tourism development businesses.
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For further inquiries:
Teresa Cecilia H. Reyes
Vice President - Finance
SM Prime Holdings, Inc.
Tel. no.: 831.1000 loc. 7820
Monday, February 24, 2014