SM Development Corporation (SMDC), the residential arm of SM Prime Holdings, Inc., recorded a 23% increase in revenue in the first quarter of 2020 to PhP11.4 billion from PhP9.3 billion in the same period last year. Reservation sales in the first quarter amounted to PhP24.8 billion.
SMDC accounts for 44% of SM Prime’s consolidated revenues. In a statement, SM Prime reported that with 16,000 housing units available, equivalent to 12 months of sale, it has enough supply to cushion the effect of construction delays in the residential projects due to the ECQ.
SM Prime recorded a consolidated net income of PHP8.3 billion in the first quarter of 2020, down by 5% compared to PHP8.8 billion in the first quarter of 2019. The Company’s consolidated revenue from January to March is PHP25.8 billion, 3% lower than PHP26.5 billion of the same period last year.
“The residential segment has shown strong growth in the first three months, abating the effect of revenue losses in the malls segment. The balance between our recurring and developmental income streams sustains our healthy financial position during this pandemic,” said SM Prime President Jeffrey C. Lim.
SM Prime’s strategic development of integrated properties proved to be resilient as this allowed the Company to be able to cope with the crisis. With low gearing and strong residential market, the Company is able to maintain strong financial position that enables it to weather the adverse economic effects of COVID-19.
Despite limited revenues, having waived PHP 8.8 billion in mall rent from March 16 to May 15, 2020, SM Prime has sufficient cash flow to support necessary operating expenses. All obligations for completed works are settled to support agency personnel, suppliers and contractors.
Moreover, SM Group, through SM Foundation, has donated a total of PHP270 million since the implementation of ECQ. The conglomerate also constructed and turned over emergency quarantine facilities (EQF) in Metro Manila to bolster the country’s response in curbing the spread of the disease.
“We believe that in a crisis like this, flight to quality will be the driver for consumers and buyers, and SM has the solution and right product,” said SM Prime Chairman of the Board, Henry T. Sy, Jr. SM Prime remains committed to being a catalyst for economic growth by delivering innovative and sustainable lifestyle cities, thereby enriching the quality of life for millions of people.
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