SM Prime Q2 Profit Hits ₱12.8B; Retail and Real Estate Drive Momentum
- bedandgoinc
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August 22,2025
SM Prime Holdings, Inc. (SMDC), one of the Philippines’ leading property developers, reported another strong performance in the second quarter of 2025, highlighting the resilience of its diversified portfolio. Net income for the quarter climbed 10% year-on-year to ₱12.8 billion, bringing first-half earnings to ₱24.5 billion, up 11% compared to the same period in 2024.
This result was supported by higher rental income from malls and offices, stable real estate sales, and rising contributions from hotels, convention centers, and ancillary businesses.
Revenue Performance in Q2 2025
For the April–June 2025 period, consolidated revenues increased 4% to ₱35.3 billion, with first-half revenues totaling ₱68 billion, a 5% rise from last year.
Breakdown of revenue drivers:
Malls and Rental Income (60% of total revenues): Contributed the bulk at ₱17 billion, up 14% YoY, driven by higher tenant sales, new openings, and stronger consumer traffic.
Residential Projects (29%): Posted ₱5.1 billion in earnings, up 2% YoY, supported by revenue recognition from completed units and past reservations.
Entertainment, F&B, and Ancillary Businesses (11%): Delivered steady results as cinemas, amusement, and dining continued their recovery.
Segment Highlights
Malls (69% of total earnings): Still the backbone of operations, supported by redevelopment projects such as Mall of Asia, which boosted both traffic and tenant revenues.
Residential (21% of total earnings): A steady contributor, though growth was more moderate compared to malls.
Offices & Warehouses (7%): Income rose 9% to ₱1.7 billion as demand for storage and flexible workspaces strengthened.
Hotels & MICE (3%): Contributed ₱635 million, up 20%, on the back of strong bookings and a busy calendar for meetings and conventions.
This broad performance reinforces SM Prime’s strength in balancing cyclical shifts by diversifying across multiple property categories.
Capex & Funding Strategy
Capital expenditure reached ₱37.3 billion in the first half, aligned with the company's ₱100-billion full-year plan. SM Prime continues to invest heavily in malls, residential projects, and infrastructure to maintain growth momentum.
To support this program, CFO John Nai Peng Ong announced plans to raise ₱15–20 billion through retail bonds in Q4 2025, aimed primarily at refinancing maturing obligations.
Management Outlook
President Jeffrey C. Lim highlighted the impact of consumer activity and business recovery:
“The redevelopment and new attractions at our flagship Mall of Asia drove strong foot traffic and tenant sales. Robust consumer activity and improving business confidence also lifted contributions across our portfolio.”
The company also noted optimism for the second half of 2025, supported by easing inflation, lower interest rates, and improving tourism activity.
Investor Insights & Market Reaction
Malls continue to be the growth engine, accounting for nearly 70% of income.
Residential earnings remain steady, providing long-term stability despite slower growth.
Hospitality and MICE segments are emerging growth drivers, benefitting from tourism recovery.
Capex execution remains on track, supported by proactive funding strategies.
Following the earnings release, SM Prime shares gained 3% to ₱24 apiece, reflecting investor confidence in the company’s growth trajectory.
Conclusion
SM Prime's Q2 2025 earnings underscore the resilience and adaptability of its integrated property business model. With malls continuing to lead growth, residential sales maintaining stability, and hospitality gaining momentum, the company is well-positioned to capitalize on stronger consumer sentiment in the months ahead.
As capex investments roll out and bond financing shores up liquidity, SM Prime is expected to sustain its performance and remain a pillar of the Philippine real estate and retail landscape.
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