SM Prime Holdings, Inc.

2014 Outlook

• New mall openings: SM City Cauayan, SM City Angono and SM Zibo in China

• Expansion of SM Megamall, SM City Bacolod and SM City Lipa

• Three new condominium projects with about 7,000 units

• Groundbreaking of ThreeE-coms and  Topping off of FiveE-com

• Construction of Park Inn in Clark

• SMX Bacolod will be launched

SM Mega Fashion Hall

On January 28, 2014, the company unveiled the 101,000-sqm SM Megamall Fashion Hall. It houses 125 new retail stores, about 90% of which are global brands, including Uniqlo, Zara and the soon-to-open Swedish brand H&M. The Mega Fashion Hall also offers a variety of the most exciting international dining concepts such as Hong Kong’s Michelin Star dimsum restaurant Tim Ho Wan, the first Saint Marc’s Cafe of Tokyo, and the gyoza specialist Osaka Ohsho. The addition of Mega Fashion Hall made SM Megamall in Mandaluyong City the biggest mall in the Philippines.

Financial Highlights (2013)

        SM Prime’s presence in four core businesses has enabled to sustain strong revenue and earnings growth in 2013. Consolidated revenues during the period rose 5% to P59.79 billion, mainly fueled by the double-digit growth contributions from mall rental, real estate sales, commercial lease, and amusement businesses. SM Prime’s combined net earnings of P16.27 billion came out close to identical to that of 2012.

        Consolidated rental revenues accounted for 54%, posting an 11% increase to P32.20 billion year-on-year. This was primarily due to the full-year effect of new malls opened in 2012, namely, SM City Olongapo, SM City Consolacion, SM City San Fernando, SM City General Santos, SM Lanang Premier, and the opening in 2013 of SM Aura Premier. SMPH shopping mall in China sustained their profit growth, posting a combined net income of P958 million, a 6% increase.

        SMPH cinema ticket sales increased by 8% to P3.74 billion as it opened more digital cinemas in their new malls. Amusements and other revenues increased by 40% to P3.08 billion. This was the result of the opening of new amusement rides in SM by the Bay and the Skyranch in Tagaytay.

        SM Development Corporation (SMDC) real estate sales for 2013 stood at P20.78 billion. Three projects were launched in 2013, namely, Grass Phase 2, Shore and Trees. The full-year recognition of revenues from TwoE-com, which began operations in mid-2012 and is now 98%-occupied, also helped push up rental revenues from commercial operations by 12% to P2.86 billion.

Pico de Loro Cove

        In 2013, SM Prime embarked on a P500 million capital expansion to build the second phase of Woodridge Place, a mid-rise condominium development. One of its two mountain-top towers, the Linden, was launched in March 2013. This 12-storey condo project sits on one of the highest elevation in the Highlands complex. Another is the Hamilo Coast project in Nasugbu, a premier beach resort which takes pride in its 13 coves, a 31-kilometer coastline and 5,900 hectares of lush terrain and natural beauty. On a 40-hectare valley within Hamilo Coast is Pico de Loro Cove, a leisure project that offers a fully equipped beach and four mid-rise residential clusters set around a tranquil freshwater lagoon.

Company Profile

SM Prime Holdings, Inc. (SMPH) was incorporated on January 6, 1994 to develop, conduct, operate and maintain the business of modern commercial shopping centers and all related businesses. The Company's main sources of revenues include rental income from leases in mall and food court, cinema ticket sales and amusement income from bowling and ice skating.

SM Group consolidated their property businesses into SMPH. The merger has made SM Prime one of the largest integrated property developers in Southeast Asia. In October 2013, SM Prime forged consortium among its related business that took five SM firms toward one direction. The first step entailed an exchange offer between SM Land, Inc. and two listed entities – SMDC and Highland Prime, Inc. The second step involved merging SM Land with SM Prime, with the latter surviving entity. The last step called for SM Prime to acquire specific real estate companies and assets that SM Investment Corp. held in exchange for new SM Prime shares.

As of December 31, 2013, SMPH has 48 SM Supermalls in the country, and five SM Supermalls in China, 22 Condominium projects, three Office Buildings, four hotels and three convention centers. The SM Prime core businesses are: (1) mall development and operations business (2) SMDC residences (3) Commercial Property Group (CPG) which manages office development and operations and (4) SM Hotels and Convention Centers, manages hotel development and operations business.

The SM Malls are: (in order of development)

Metro Manila

North EDSA                 Mall of Asia

Sta. Mesa                   Pasig

Megamall                    Muntinlupa

Southmall                   Marikina

Fairview                      Las Pinas

Manila                        Novaliches

Sucat                         Aura

Bicutan                       BF Paranaque

San Lazaro

Valenzuela

Provincial

Cebu                         Taytay

Bacoor                       Bacolod

Iloilo                          Baliwag

Pampanga                  Rosales

Davao                        Naga

Cagayan de Oro          Rosario

Baguio                       Calamba

Lucena                       San Pablo

Marilao                      Tarlac

Batangas                    Masinag

Dasmarinas                 Olongapo

Molino                        San Fernando

Clark                          Consolacion

Lipa                           General Santos

Sta. Rosa                    Lanang, Davao

China

 

SM City Xiamen

 

SM City Jinjiang

SM City Chengdu

SM City Suzhou

 

SM City Chongqing

 

Board of Directors:

·         Henry Sy, Sr. – Chairman Emeritus

·         Henry Sy, Jr. – Chairman

·         Jose L. Cuisia, Jr. – Vice Chairman

·         Hans Sy – President

·         Joselito H. Sibayan

·         Jorge T. Mendiola

·         Gregorio U. Kilayko

·         Herbert T. Sy

Financial Statements (in millions)

Balance Sheet	2013	2012	2011
Total Assets	335,584	284,652	228,863
Investment Properties	171,666	147,854	129,972
Total Debt	106,313	80,580	55,932
Stockholders’ Equity	163,267	147,628	126,658
Income Statement
Revenues	59,794	57,215	50,069
Cost and Expenses	35,659	35,145	30,772
Operating Income	24,136	22,070	19,297
Net Income	16,275	16,203	13,629
Financial Ratios
Debt to Equity	0.39:0.61	0.35:0.65	0.31:0.69
Return on Equity	.10	.12	.11
Net Income to Revenues	.27	.28	.27
Earnings per Share	.586	.584	.491

 Technical Stock Graph 

Source: Bloomberg

On March 19, 2009, SM Prime stock had a market value of P5.60. As of this date, it is P16.32 per share. If you invested P10,000 for SM Prime shares in 2009, it would amount P26,168 today.

Price:   16.32/share (as of May 2, 2014)

Market Cap:  454,008 million (as of May 2, 2014)

Address:  Mall of Asia Arena Annex Building, Coral Way cor. J.W. Diokno Blvd., Mall of Asia Complex

Web site:  www.smprime.com

Source:  SM Prime Annual Report 2013