Philippine Builder Posts Decade-Low Profit as Virus Hurts Malls

(Bloomberg) -- SM Prime Holdings Inc., the Philippines' largest property company, posted its lowest quarterly profit in a decade in the three months to June as the pandemic strangled foot traffic in its shopping malls.

Second-quarter net income plunged to 2.08 billion pesos ($42.4 million), about a fifth of the 10.5 billion pesos it made a year ago and the lowest since the third quarter of 2010. It was derived by deducting the 8.32 billion peso first-quarter profit SM Prime reported in May from the 10.4 billion peso first-half earnings it released Monday.

SM Prime is intensifying its online push with an e-commerce platform that helps its mall tenants complement their brick and mortar shops, President Jeffrey Lim says in statement.

First-half rental income at its shopping malls plunged 44% to 13.1 billion pesos from a year ago as revenue was almost halved as it either waived rentals or gave discounts to tenants since lockdowns were imposed in March, which it said amounted to 11 billion pesos at end-June. First-quarter mall rental income was at 10.1 billion pesos.

Almost a third of SM Prime's market value was erased this year, and its valuation along with other Philippine property stocks could fall further as the Southeast Asian nation continues to struggle in containing the spread of the virus.

Meanwhile, SM Prime's residential business posted an 11% gain in first half sales to 23.7 billion pesos and generated 42.4 billion pesos in reservation sales. It has available inventory of 12,000 residential units as of June.

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