SM Prime H1 profit down 46 percent as malls rental income hit by lockdowns

SM North EDSA mall in Quezon City. March 20, 2020. FILE / Jonathan Cellona, ABS-CBN News

SM Prime posted a consolidated net income of P10.4 billion in the first half of the year, down 46 percent from the same period in 2019 as the COVID-19 pandemic disrupted mall operations.

The company said rent income from its malls fell 44 percent to P13.1 billion in the January to June period as SM Prime waived rent and gave rental discounts to tenants since the start of quarantine measures in March.

“The first half of 2020 has been one of the most challenging periods we’ve faced as a company,” said SM Prime President Jeffrey Lim.

The company said it is intensifying its online strategy with an e-commerce platform that allows tenants to complement physical stores inside SM malls with an online interface for customers, as well as providing pick up points within the mall for online sales of tenants.

It has also promoted cashless transactions amid safety concerns, and launched a drive-in cinema for moviegoers in Pampanga, which is under the least strict community quarantine category.

SM Prime said that while its mall business was facing challenges, its residential business saw an 11 percent growth in revenue in the first half. Construction of new residential projects has also resumed, SM Prime said.

Revenue from its commercial properties also grew 16 percent, as BPOs and hotels remained operating. SM Prime said its hotels in Metro Manila and Iloilo catered to BPO employees who needed accommodations during the lockdown, and overseas Filipino workers who were returning from abroad.

SM Prime shares ended lower at P28.55 a piece, down 4.83 percent on Monday.

-ABS-CBN News

Source: Peso Economics