The Philippines' leading mall developer and operator, SM Prime Holdings, Inc. (SMPH), saw earnings rise 10% in the second quarter of 2005, on the back of strong rental revenues.
SMPH reported a net income of P1.17 billion in the three-month period ending June 2005, compared with P1.07 billion the same period in 2004. This brought SMPH's net income for the first half of 2005 to P2.41 billion, or P0.243 per share. This is an increase of 8% from last year's first half net income of P2.23 billion, or P0.225 per share.
Rental income from leases in the malls and food courts remained the biggest contributor to total revenues, with a 12% growth to P4.29 billion in the six months to June 2005, from the second half of last year's P3.84 billion. Rental income increased largely due to the opening of two SM Supermalls in 2004, namely SM City Dasmarinas and SM City Batangas. The occupancy level for both malls is now at 97%.
Gross revenues rose 6% to P5.19 billion in the first half from last year's P4.92 billion, even as expenses grew 8% due to the opening of the two new malls. Operating expenses reached P2.21 billion in the first half, compared with the P2.05 billion in 2004.
Prospects for growth continue to be positive for the rest of the year, SMPH Vice President for Finance and Administration Jeffrey C. Lim said, pointing to the opening of additional malls. SMPH opened its 20th mall, SM City San Lazaro, on July 15 and is scheduled to open three more this 2005. These are SM Valenzuela, opening in October; SM Molino, opening in November; and the SM Mall of Asia, opening in December. The Mall of Asia is designed to become the country's biggest shopping, dining, entertaiment, and leisure complex.