SMDC News in Business World 080410

SM units post double-digit growth
Wednesday, August 4, 2010
by Neil Jerome C. Morales

STRONG SALES propelled the mall and property units of the Sy mall and banking conglomerate to double-digit profit growth in the first half.

Net income of SM Development Corp. (SMDC) jumped by 24% growth to P1.3 billion in the first half due to strong sales of new projects.

SM Prime Holdings, Inc., the country's largest mall developer, reported an 11% profit rise to P1.9 billion in the second quarter and a 10% consolidated net income growth to P3.8 billion in the first half due to higher consumer spending.

In a statement, SM Development said it had a 77% increase in realized revenues from real estate operations for the first half to P4.1 billion, from P2.3 billion in the same period last year.

Net recurring income from real estate operations climbed by 47% to P1.1 billion in the first half from P800 million the previous year.

"SM Development's healthy and dynamic performance during the first half of the year is a result of the dedicated service of the SMDC team and the market's strong acceptance of our product offerings," Henry T. Sy, Jr., vice-chairman and chief executive of SM Development, said in the statement.

Preselling more than tripled to P12.4 billion in the first half due to "strong market take-up" of new projects such as Princeton, Light, Jazz, Sun, and Wind Residences.

SM Development has 13 residential projects in the market. In May, SM Development borrowed P10 billion through corporate notes for its land banking activities.

Meanwhile, SM Prime said its consolidated revenues grew by 17% to P11.3 billion in the first half, compared with P9.6 billion in the first semester of 2009.

"The encouraging results delivered by SM Prime validate our positive sentiment on the economy, which is further bolstered by robust consumer spending," SM Prime President Hans T. Sy said in a statement.

"We look at the second half of the year with more optimism in executing our expansion plans," Mr. Sy added.

First-half consolidated rental revenues climbed by 13% to P9.5 billion.

"The increase was supported by the continued strength of the consumer and remittance sectors and the added space resulting from the opening of new malls in 2009," the company said.

By yearend, SM Prime expects to have 40 malls in the Philippines, with an estimated gross floor area of 4.7 million square meters.

Shares in SM Prime rose to P10.74 apiece yesterday from P10.66 on Monday.

Shares in SM Development inched up by P0.05 to close at P6.75 apiece yesterday.