Sime Darby Property’s 1Q plunges on lower sales
Malaysia Vision Valley

by FARA AISYAH/ pic by TMR FILE

SIGNIFICANT losses made in the property development segment, other losses and higher finance costs slashed Sime Darby Property Bhd’s earnings by 94.66% to RM14.15 million in the first quarter ended Mar 31, 2020 (1Q20), from RM265.08 million a year ago.

Weaker consumer sentiment and the expiration of the Home Ownership Campaign on Dec 3, 2019, led to lower sales of both landed and high-rise units compared to the corresponding period of the previous year.

On-site construction activities were halted for 14 days in the current quarter, resulting in delays in the delivery of projects, the developer noted in its exchange filing yesterday.

Quarterly revenue dropped 17.11% year-on-year to RM476.74 million and was mainly derived from the City of Elmina and Bandar Bukit Raja township projects, as well as land sales.

For the quarter under review, the developer launched 583 units in Elmina East, which consists of 513 units of landed linked homes and three-storey commercial shops.

Development projects that performed better in the current quarter include Elmina West, Subang Jaya City Centre, Ara Damansara and Nilai Utama townships.

Sime Darby Property group MD Datuk Azmir Merican Azmi Merican said the company will streamline its efforts to promote the right product launches and improve on processes and systems, which would enable it to become more agile and adaptable to respond to the fast-paced challenges of these current times.

“We will also prioritise our areas of focus to what will make a difference for 2020, in particular strengthening our resilience against the global and domestic macro-economic headwinds and the market uncertainties brought by the Covid-19 pandemic, which is unprecedented in its magnitude,” he added.

The developer foresees the coming months will be adversely affected by the spillover effects of the pandemic on consumers’ purchasing power thus, resulting in a moderation of property sales.

As at 1Q20, the company’s unbilled sales stood at RM1.5 billion, coupled with a targeted pipeline of new launches.