Friday, August 15, 2008 SM posts investment growth
SM INVESTMENTS Corporation (SM), the country's leading mall operator, has reported a net income of P6.5 billion or 14 percent increase for the first half of 2008.
SM president Harley Sy said: "SM's sound performance during the first half of the year amid many market challenges reinforces the defensive position that SM has taken over the years. Our businesses have been equipped to sail through headwinds of spiraling fuel and food prices and changing consumer patterns."
He added "we continue to take a long-term perspective so that we view the market turbulence as being temporary. As such, we remain on course as far as our expansion program is concerned."
According to Sy, the companies consolidated revenues increased by 17 percent to P65.6 billion, as retail sales jumped by 21 percent to P52.6 billion. Rental revenues from malls and other properties grew by 11.8 percent to P6.4 billion.
In July, despite turbulence in the international financial market, SM successfully issued another landmark deal with its US$350 million worth of five-year bonds with a three-year put option fetching a low fixed rate of 6.75. The issue, which was unrated, was the largest to date and the first successful international bond offering by a Philippine corporate in the last two years.
The bond proceeds will be used to fund SM's expansion into non-mall property projects, among others.
Sy said shopping malls contributed the most to the company's net income profile, accounting for 34 percent of the total followed by retail merchandising and banking with 32 percent and 27 percent, respectively while its real estate business contributed seven percent.
For the rest of 2008, SM Prime, operator of SM malls is scheduled to open new shopping complex in Marikina, Rosales, Nagtahan, and Baliuag.
Expansion of existing malls are likewise ongoing, namely, SM Megamall, SM City North EDSA, and SM City Fairview. By end 2008, total gross floor area for all SM Prime malls in the Philippines is estimated to reach 4.4 million square meters.
For its real estate business, the company said revenues from real estate operations for the first semester of 2008 increased by 135.7 percent to P3.4 billion, while net income increased by 116.3 percent to P0.70 billion.
Contributions came from condominium projects of SM Development Corporation (SMDC); the leasing activities of the commercial properties group; resort projects of Costa del Hamilo ("Hamilo"), SM's tourism vehicle that is developing the Pico de Loro Cove project in Nasugbu, Batangas; and hotel operations.
At present, SMDC has five ongoing housing projects. The Mezza, Berkeley, and Grass Residences are condominium projects all located in Quezon City. Another condominium project, the Chateau Elysee, is in Parañaque City, while Lindenwood Residences, which is a residential subdivision, is in Muntinlupa City.
This month, SMDC will launch two more condominium projects - the Sea Residences near the Mall of Asia Complex in Pasay City and the Field Residences in Sucat, Parañaque City. Also in the pipeline is the Wind Residences, which will be in Tagaytay City. (MSN/Sunnex)
