SM Prime Holdings Inc. on Monday said its income in January to June came in flat at P24.5 billion compared with the previous year’s P24.45 billion, as costs and expenses eclipsed revenue growth.
Total revenues grew 5 percent to P71.7 billion from P68 billion, with rental income from malls, offices, hospitality and MICE accounting for 61 percent.
‘Our focus on tenant relationships, customer experience and cost management supported our performance. Despite challenging market conditions, commercial demand remained resilient across our portfolio,’ said Jeffrey C. Lim, SM Prime president.
Lim said the company is targeting to at least match last year’s income of P48.84 billion. Real estate sales for the period contributed 27 percent, while cinema ticket sales, food and beverage, amusement and related offerings generated the remaining 12 percent.
Costs and expenses during the same period increased 6 percent to P35.6 billion from P33.6 billion, due to higher depreciation and amortization charges, fixed overhead costs and construction expenses.
Mall revenues grew 8 percent to P41.8 billion from P38.6 billion on the combined effect of higher occupancy, stronger tenant sales and improved operational efficiency.
Residential revenues, covering core, leisure and premium offerings, slipped 1 percent to P20.6 billion from P20.9 billion on lower revenue recognition from prior-year sales.
Revenues from hotels and convention centers expanded 8 percent to P4.4 billion from P4.1 billion owing to higher bookings and average daily room rate.
Office and warehouse revenues rose 9 percent to P5.0 billion from P4.6 billion, driven by higher space take-up.
Second-quarter consolidated net income rose 1 percent to nearly P12.9 billion from P12.8 billion, as costs grew in line with revenues.
Total revenues from April to June increased 9 percent to P38.4 billion from P35.3 billion.
Meanwhile, costs and expenses went up by nearly 9 percent to P19.0 billion from P17.5 billion, mainly due to higher construction costs.
Capital expenditures declined 18 percent to P30.7 billion in the first half from P37.3 billion a year earlier.
Last April, SM Prime announced that it will invest more than P6 billion to redevelop SM Harrison Plaza on the former Harrison Plaza Complex in Manila, which is slated to open next year.
The project forms part of SM Prime’s P150-billion mall investment program for 2026 to 2030, which includes the major redevelopment of 16 existing malls and the construction of 12 to 15 new lifestyle malls.
Steven T. Tan, president of SM Supermalls, said the company expects to have 115 malls by 2030 or four to five malls per year, as SM expands its footprint outside of Luzon and Metro Manila.
Tan also said the company is aiming to open 100 malls by 2027 or 2028, and will launch one flagship or premier mall per year through 2030, as it expands its reach in the Visayas and Mindanao.