SM Prime 9-month income slips 5%

SM Prime Holdings Inc. is not slowing down on its investments for next year, with capital expenditures seen reaching up to P100 billion, despite macroeconomic challenges that weakened its net income in the first three quarters.

At a media briefing on Monday, SM Prime president Jeffrey Lim said the company remained confident in the long-term prospects of its portfolio, thus will continue to invest across all businesses.

However, amid current conditions spoiling demand, the official said SM Prime would “be more selective about which projects to prioritize and when to proceed with them.”

“We’re not putting our expansion plans on hold. We are simply being more deliberate about how we spend, and we will focus on projects with stronger demand while keeping the flexibility to adjust our plans as market conditions evolve,” he said. In the first nine months, SM Prime posted a slight drop in net income despite healthy mall and rental performances, as sluggish residential demand hit the Sy-led group.

The property giant reported that its consolidated net income had decreased by 5 percent to P35.4 billion from P37.2 billion.

For the July to September period, its consolidated profit slipped by 15 percent to P10.9 billion versus P12.8 billion in the same period last year.

Consolidated revenues in the first nine months were almost flat from a year ago, reaching P103.1 billion.

“Higher borrowing costs, elevated inflation and cautious consumer spending continued to weigh on residential demand. However, growth in our commercial and hospitality businesses helped keep revenues steady,” Lim said.

Broken down, rent income improved by 8 percent to P66 billion from P61 billion, while real estates saw a 23-percent drop to P24 billion.

Malls continued to be the revenue driver, accounting for more than half of the topline, or P63.7 billion. SM Prime said this was fueled by additional leasable space, higher tenant occupancy and strong demand for dining and experiential offerings.

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The residential segment, meanwhile, fell by 21 percent to P25.6 billion from P32.6 billion.

SM Prime realized higher contributions from offices and warehouses at P7.8 billion against the previous P7 billion.

The group also recorded P6.4-billion revenue contribution from its hospitality and meetings, incentives, conferences and exhibitions portfolio.

Other revenues, comprising leisure, entertainment, hotel dining, advertising and sponsorship income, jumped 17 percent to P13.1 billion.