AN UPTICK in demand in the property sector pushed profits of listed SM Development Corp. to a record P3 billion last year, the company told the local bourse on Friday.
The residential development arm of Henry Sy’s mall and banking conglomerate posted a 62% surge in net income from P1.9 billion in 2009. "Noteworthy 2010 results were due in part to the further completion, sustained warm market acceptance of SM Residences and MPlace units, and high customer satisfaction for the company’s various projects," SM Development said.
"Favorable economic conditions prevailing in the Philippines during the year also supported SM Development’s positive performance," it added.
Profits from real estate operations grew by 66% to P2.6 billion. Consolidated revenues climbed by 74% to P10 billion, SM Development said. Last year, SM Development pre-sold 10,338 residential units worth approximately P21.8 billion, higher by 129% from the previous year.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) -- an indicator of cash flows for highly leveraged firms -- reached P3.7 billion, or an EBITDA margin of 40%.
"The strong results achieved by SM Development in 2010 attest to the proven viability of its business model, which is to provide high quality residences in strategic locations at affordable price points," Henry C. Sy, Jr., vice-chairman and chief executive of SM Development, told reporters.
To date, the property firm has a portfolio of 14 residential projects, 13 of which are in Metro Manila. Last year, the company launched its new brand, MPlace, which targets young professionals like business process outsourcing employees. "With many of its residential projects nearly sold out, SM Development plans to unveil five new projects this year," the company said.
Last month, Mr. Sy said the property developer was looking at raising as much as P10 billion through the equity market in the first half to bankroll expansion here and in China. The firm expects profits this year to reach more than P4 billion.