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MANILA, Philippines - The Philippines' biggest mall developer-operator said its first-quarter profit rose 15 percent because of new malls and the single-digit growth of same-store rentals.
In a statement, SM Prime Holdings Inc. said its consolidated net income climbed to P2.43 billion in the January to March period from P2.12 billion in the same three-month period last year.
Revenues grew 16 percent to P7.03 billion this year from P6.07 billion in 2011. Same-store rentals rose eight percent, even as SM Prime opened new malls in the Philippines.
Rental revenues accounted for 86 percent of the company's revenues and increased 15 percent to P6.03 billion. Six malls - including the newly-opened SM City Olongapo - added 427,000 square meters of gross floor area with an average occupancy rate of 93 percent.
The first-quarter figures also include the operations of its four malls in China. Located in the cities of Xiamen and Jinjiang in Southern China, Chengdu in Central China, and Suzhou in Eastern China, SM Prime's China operations expanded 34 percent to P0.62 billion.
Cinema ticket sales grew 23 percent because of popular movies shown in the first quarter, including blockbusters such as “Unofficially Yours”, “Enteng ng Ina Mo,” and “The Hunger Games."
“SM Prime’s better-than-expected performance during the first three months is a welcome development. It confirms our optimism in the Philippine economy and SM's ability to thrive in competitive environments in China," said Hans T. Sy, SM Prime president.
"This bodes well with our plan this year to open five new malls in the Philippines and one in China. With these new malls, SM Prime greatly enhances its capability to serve the varied needs of its clients and to maintain its dominant position in the industry,” he added.
Sy told reporters that the company expects that the 15-percent growth can be maintained throughout the year, “barring any major set backs or problems” given that the government is set to push through with its public private partnership program, which would spur spending.
He also said the continued rise in OFW remittances and the growth of the business process outsourcing help in bolstering consumer spending.
Meanwhile, Sy said the issue with SM Baguio and the environmental groups is a miscommunication between the two sides. He said they have had been complying with all the requirements and securing clearances needed for the expansion and redevelopment of the mall.
“Everything had been very regular. But we never realized that there would be a small group who would really stand up against [it]. And there were many--I would call them--misinformation and disinformation--that has created problems,” Sy said.
The company this year plans 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.
By the end of this year, SM Prime will have 46 malls in the Philippines and five in China with an estimated combined gross floor area of 6.3 million square meters.
To fund its expansion, the company plans to raise P5 billion up to P7 billion from the sale of 5-year bonds. This fund-raising exercise will be underwritten by First Metro Investment Corp.
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