SM Prime Reports Steep 46% Drop in Net Income in First Half of 2020
SM Prime Holdings, Inc., the property arm of the SM Group, reported a consolidated net income of P10.4 billion in the first half of 2020, down 46 percent from P19.3 billion during the same period last year.
Consolidated revenue for the first six months of 2020 also went down 23 percent, from P57.0 billion last year to P43.7 billion this year.
The company said it's still reeling from the effects of the coronavirus pandemic.
“The first half of 2020 has been one of the most challenging periods we’ve faced as a company,” said Jeffrey C. Lim, SM Prime president. “With the government maintaining the implementation of quarantine protocols in most key areas in the Philippines where our businesses are, SM Prime is committed to sustaining its operations while adhering to the strict safety measures implemented by the government and continue providing convenience to our customers.”
Rent income from SM malls dropped by 44 percent from P23.3 billion during the first six months of 2019 to P13.1 billion in the same period this year, as was mall revenues, which dipped 49 percent to P14.4 billion from P28.1 billion last year. The company said this was driven primarily by waived rent and rental discounts granted to tenants since the start of the quarantine measures in March, which it said amounted to P11 billion as of end-June.
SM said it is continuing to intensify its online strategy with the introduction of an e-commerce platform as well as promoting cashless transactions through digital payment options. The company has also launched a modern drive-in cinema for a safer and exciting movie-watching experience.
A bright spot in SM Prime’s business is its residential business, led by SM Development Corp. (SMDC), which recorded P23.7 billion revenue in the first half of 2020, 11 percent higher from P21.4 billion during the same period last year. This accounts for 54% of the company’s consolidated revenues.
Meanwhile, SM Prime’s commercial properties business’ revenue also surged 16 percent to P2.5 billion in the first half of 2020, with operating income at P2.2 billion, which is 22 percent higher than P1.8 billion during the first six months of 2019.
The hotels and convention centers business segment contributed P1 billion to the first half of 2020 consolidated revenues despite limited operations. The Group’s hotels, which include Conrad Manila, Park Inn Clark, Park Inn North EDSA and Park Inn Iloilo, remained operational to cater to BPO employees and returning overseas Filipino workers/seafarers.
SM’s Mall of Asia Arena was also converted into a Mega Swabbing Facility in partnership with various government agencies, to help frontliners as well as returning overseas workers.