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Restrictions slash SM Prime income by 22% in January-March

SM Prime Holdings Inc. on Monday said its income in the first quarter fell 22 percent to P6.5 billion, from the previous year’s P8.39 billion, as many of its businesses grappled with the economic impact of quarantine restrictions.

Revenues for the January-to-March period fell 20 percent to P20.8 billion from the previous year’s P26.19 billion.

“We welcomed 2021 with high hopes as most areas in the Philippines, including Metro Manila, were placed under GCQ [general community quarantine] in the first quarter of 2021. Along with the sustained growth of our residential business, our mall affiliates together with many of our SME-partners were able to reopen their shops, allowing our mall business segment to perform better,” SM Prime President Jeffrey C. Lim said.

SM Prime’s residential business SM Development Corp. (SMDC) reported a 5-percent revenue growth to P11.9 billion for the period from P11.4 billion last year. This accounts for 57 percent of the company’s consolidated revenues.

SMDC’s operating income rose 9 percent to P5.1 billion from the previous P4.6 billion.

Reservation sales rose 31 percent in the first quarter to P32.4 billion from P24.8 billion last year with the newly launched residential projects in Metro Manila, such as Gold Residences in Parañaque, South 2 Residences in Las Piñas, Mint Residences in Makati, Sands Residences in Manila and Sail Residences in Pasay, which accounted for almost 70 percent of the reported reservation sales.

The company aims to launch 15,000 to 20,000 residential units in 2021, it said.

SM Prime’s local mall business accounted for 28 percent of the consolidated revenues from almost half last year.

Mall revenues fell 47 percent to P5.9 billion in the first three months of the year from the previous year’s P11.3 billion. The first quarter of last year’s figures were already lower compared with 2019 as its malls were affected by the initial blow of the lockdown measures and the Taal Volcano eruption in January 2020.

SM Prime’s China malls registered a 53-percent growth in revenues to RMB199 million (about P1.47 billion) in the first quarter from RMB130 million (P965 million) last year. The positive growth of the company’s international malls signals a return to normal operations after the government-imposed lockdown last January 2020.

The company intends to launch three new malls this year in Daet in Camarines Norte, Roxas in Capiz and in Grand Central, Monumento in Caloocan City. These new malls, plus the expansion of the company’s existing malls, will add almost 270,000 square meters of gross floor area of retail space.

SM Prime’s other business segments, which include offices and hotels and convention centers, contributed P1.6 billion to the company’s consolidated revenues, down 27 percent from last year’s P2.2 billion.  These segments accounted for 7 percent of the company’s consolidated revenues.

The commercial properties group, which manages the company’s office business, continues to operate at an optimal level, while its hotels and convention centers’ operations follow guidelines set by the Covid-19 Inter-Agency Task Force, the company said.

Read full article on BusinessMirror

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