SD Property exceeds sales target

By TMR / Pic By ISMAIL CHE RUS

Sime Darby Property Bhd (SD Property) recorded a total sales of RM1.34 billion for the six-month financial period which ended on Dec 31, 2018 — 30% higher than its initial target of RM1 billion.

Malaysia’s largest property developer based on landbank said it has set a RM2.3 billion sales target for the new financial year ending Dec 31, 2019.

The company posted a revenue rise of 7.9% to RM1.27 billion for the six-month period due to the improved performance of its property development and concession arrangement segments.

However, the company posted a loss of RM318.7 million, largely due to impairments, negative contribution from the Battersea Power Station project and higher tax provisions.

“Having addressed our legacy assets and products, we expect an immediate return to profitability as operationally, our performance has been positive. Our launches during the period were well received and we expect this to continue into the first half of 2019 (1H19),” said chairman Tan Sri Dr Zeti Akhtar Aziz (picture).

The developer’s landed products in Serenia City, Selangor, continues to be strong with 99% of Serenia Adiva sold in October. Sales of its double-storey landed homes in Bandar Bukit Raja, Klang, had also been encouraging.

“The prolonged softness of the property market remains a major challenge, but we are hopeful of a silver lining with concerted effort from the public and private sectors,” said group MD Datuk Seri Amrin Awaluddin, adding that the company will continue to review plans for the year to ensure that our pricing strategy and future launches are responsive to market demand.

For the second quarter ended Dec 31, 2018, the company launched a total of 801 units with a combined gross development value of RM675.5 million, mainly in Bandar Bukit Raja, Serenia City, Nilai Impian and Elmina West.

Meanwhile, the company recorded a loss of RM347.4 million for the October-December period compared to a net profit of RM138 million during the same period a year before.

Revenue for the quarter rose to RM788.8 million compared to RM703.6 million a year ago.

The loss at SD Property was largely due to impairment of aged inventories and receivables of RM110.8 million and RM26 million respectively, write-offs of capitalised development expenditure of RM99.8 million for deferred projects and additional tax provisions of RM177.5 million.

The company said it expects to achieve satisfactory results for the financial year 2019, taking into account the sluggish property market.

“The Malaysian property market remains muted and lacklustre, and this is expected to persist in the near term due to the high volume of unsold properties, mismatch in demand and supply, continued stringent lending conditions and cautious sentiment among buyers.

“The group hopes to benefit from the recent introduction of new policies and incentives aimed at the property market, such as the National Housing Policy 2.0 and the funding initiative announced by Bank Negara Malaysia, which are expected to encourage greater home ownership and improve the current lending constraints, thereby boosting the property sector,” according to its financial statement filing.