Sime Darby Property’s 2Q19 earnings improve more than 4-fold to RM205m

We are seeing healthy demand for our products, especially landed homes at the right price points, according to its acting group CEO


SIME Darby Property Bhd’s net profit for the second quarter ended June 30, 2019 (2Q19), improved more than fourfold to RM205.26 million from RM46.57 million in the previous corresponding period.

Apart from higher contribution via the property development segment, the positive growth was supported by lower losses in its leisure and hospitality segment.

Gains were also made from the disposal of land in Selarong, Kedah, for RM81.1 million as part of the group’s non-core asset monetisation plan.

The developer posted a higher earnings per share of three sen in the quarter, from 0.7 sen in 2Q18.

Its quarterly revenue also rose 40.26% year-on-year (YoY) to RM865.9 million from RM617.37 million in the same period last year.

“We are seeing healthy demand for our products, especially landed homes at the right price points.

“There continues to be underlying demand for properties in strategic locations and this is well supported by the government’s Home Ownership Campaign,” Sime Darby Property acting group CEO Datuk Wan Hashimi Albakri Wan Ahmad Amin Jaffri (picture) said.

For the first half of 2019 (1H19), Sime Darby Property posted a 486.15% YoY growth in net profit to RM470.33 million from RM80.24 million.

Its revenue for 1H19 also increased 22.03% YoY to RM1.44 billion compared to RM1.18 billion.

The property development segment’s profit contribution jumped by 410.1% to RM248.6 million in the six-month period.

The group noted that excluding the Kedah land disposal, the segment’s profit was driven by higher sales and development activities in Bandar Bukit Raja, Bukit Jelutong, City of Elmina, Nilai Impian and Cantara Residences in Ara Damansara.

Sime Darby Property’s share of losses from joint ventures (JVs) and associates halved to RM12 million from RM25.2 million in 1H18, mainly due to lower share of losses from the Battersea and Sime Darby Sunrise JVs.

The higher loss in 1H18 was mainly due to the group’s share of RM12 million impairment losses in Sime Darby Sunrise Development Sdn Bhd.

Sime Darby Property has launched a total of 2,082 units with a combined gross development value of RM1.2 billion — mainly in City of Elmina and Bandar Bukit Raja in Selangor, KL East in Kuala Lumpur (KL), and Bandar Universiti Pagoh in Johor.

The developer has total unbilled sales of RM1.5 billion as at 1H19.

Sime Darby Property’s total sales for 1H19 increased 20.3% YoY to RM1.4 billion, supported by two marketing campaigns — Primetime 8 and Pop Raya — which ran for 14 weeks from March this year.

The group targets to launch new properties from the affordable collections (below RM500,000 per unit) and mid-range priced products (RM500,000 to RM800,000 per unit) via the ongoing Spotlight 8 Campaign which will last eight consecutive weeks from July 13 to Sept 28, 2019.

“We are committed to reduce our inventories, particularly the completed unsold products through active sales promotions such as the Spotlight 8 Campaign. We are also continuing efforts to expand into the key growth sector of managed industrial and logistic parks in Bandar Bukit Raja, City of Elmina, Serenia City and Malaysia Vision Valley 2.0 in order to grow recurring income,” Wan Hashimi Albakri said.

Sime Darby Property has declared a first interim single-tier dividend of one sen to be paid on Oct 22, 2019.