Earnings of SM Prime Holdings Inc. remained steady in the first half despite challenging market conditions.
SM Prime reported a first half net income of P24.5 billion, steady from a year earlier, as costs and expenses eclipsed revenue growth.
Second quarter consolidated net income improved by one percent year-on-year to P12.9 billion as costs grew in line with revenues.
Revenues for the first semester grew by five percent to P71.7 billion from P68 billion, with rental income from malls, offices, hospitality and MICE (meetings, incentives, conferences and exhibitions) accounting for 61 percent.
Real estate sales contributed 27 percent, while cinema ticket sales, food and beverage, amusement and related offerings generated the remaining 12 percent.
SM Prime said higher depreciation and amortization charges, fixed overhead costs and construction expenses, however, pushed costs and expenses up by nearly six percent during the period to P35.6 billion.
‘Our focus on tenant relationships, customer experience and cost management supported our performance. Despite challenging market conditions, commercial demand remained resilient across our portfolio,’ SM Prime president Jeffrey Lim said.
From January to June, SM Prime saw mall revenues grow by eight 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, meanwhile, dipped by one percent to P20.6 billion on lower revenue recognition from prior-year sales.
Revenues from hotels and convention centers climbed by eight percent to P4.4 billion from P4.1 billion as a result of higher bookings and average daily room rate.
Office and warehouse revenues rose by nine percent to P5 billion from P4.6 billion, driven by higher space take-up.