SM Lost P8.8 Billion After It Waived Mall Rent for Two Months

The SM Group reported that it lost a total of P8.8 billion in revenues after it waived rent for its shopping mall tenants from March 16 to May 15. Despite the loss, the company said it has “sufficient cash flow to support necessary operating expenses,” according to its first quarter earnings report to the Philippine Stock Exchange. 

SM Prime Holdings recorded revenues of P25.8 billion from January to March 2020, down three percent from the P26.5 billion it earned during the same period last year. Net income was also down five percent, from P8.8 billion during the first quarter last year to P8.3 billion this year.

“The Company’s first quarter results reflect the business disruption impact of the quarantine measures implemented last March 16, which affected primarily our leasing businesses,” said SM Prime President Jeffrey C. Lim. “The residential segment has still 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.”


Except for stores that deliver products and services deemed essential, SM Prime’s mall business have closed since the announcement of the enhanced community quarantine. The segment, which accounts for 47 percent of consolidated revenues, posted earnings of P11.3 billion during the first quarter, down 16 percent from the P13.5 billion during the same period last year. Mall rental income, meanwhile, registered P10.1 billion, 12 percent less than last year’s P11.5 billion.

Accounting for 44 percent of total revenues, SM Prime’s residential group increased revenues by 23 percent, from P9.3 billion last year to P11.4 billion this year, with SMDC’s reservation sales in the first quarter of 2020 amounting to P24.8 billion. 

SM Prime’s other business segments reported a consolidated revenue of P2.2 billion in the first three months of the year, while operating income of these businesses was at PHP1.1 billion, down nine percent from P1.2 billion during the same period last year.

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SM said it has donated through the SM Foundation a total of P270 million to COVID-19 relief efforts as well as contsructed and turned over emergency quarantine facilities (EQF) in Metro Manila “to bolster the country’s response in curbing the spread of the disease.”

The company said it intends to maintain its budget of P80 billion capital expenditures for 2020 to focus on projects that will deliver sustainable returns in the long term. It will also continue to explore opportunistic acquisitions and investments. 

“We believe that in 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.

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Paul John Caña
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