SM Prime Holdings, Inc.’s net income was flat at P24.5 billion in the first half of the year, as higher costs and expenses offset a 5-percent increase in revenues.

In a stock exchange report on Monday, the company said total revenues rose 5 percent year on year to P71.7 billion from P68 billion, while costs and expenses increased nearly 6 percent to P35.6 billion from P33.6 billion.

The increase in expenses was driven by higher depreciation and amortization charges, fixed overhead costs, and construction expenses.

“Our focus on tenant relationships, customer experience and cost management supported our performance. Despite challenging market conditions, commercial demand remained resilient across our portfolio,” SM Prime president Jeffrey C. Lim said.

Rental income from malls, offices, hospitality and meetings, incentives, conferences and exhibitions accounted for 61 percent of total revenues.

Real estate sales contributed 27 percent, while cinema ticket sales, food and beverage, amusement and related offerings made up the remaining 12 percent.

Mall revenues grew 8 percent to P41.8 billion from P38.6 billion, supported by higher occupancy, stronger tenant sales and improved operational efficiency.

Residential revenues, covering core, leisure and premium offerings, slipped 1 percent to P20.6 billion from P20.9 billion due to lower revenue recognition from prior-year sales.

Revenues from hotels and convention centers increased 8 percent to P4.4 billion from P4.1 billion on higher bookings and average daily room rates.

Office and warehouse revenues rose 9 percent to P5.0 billion from P4.6 billion, driven by higher space take-up.

For the second quarter, SM Prime’s consolidated net income edged up 1 percent to nearly P12.9 billion from P12.8 billion as costs grew in line with revenues.

Total revenues from April to June climbed 9 percent to P38.4 billion from P35.3 billion.

Costs and expenses during the quarter likewise rose nearly 9 percent to P19.0 billion from P17.5 billion, mainly due to higher construction costs.

As of June, SM Prime’s total assets stood at P1.1 trillion. Capital expenditures declined 18 percent to P30.7 billion in the first half from P37.3 billion a year earlier.