SD Property slips into red in 2Q

Its quarterly revenue dipped to RM288m due to the write-down of completed inventories and impairment of receivables and contract assets


SIME Darby Property Bhd (SD Property) slipped into the red in the second quarter ended June 30, 2020 (2Q20), due to severe business disruptions caused by the Covid-19 pandemic.

The developer posted a net loss of RM81.77 million compared to RM205.26 million registered a year ago.

Its quarterly revenue dipped to 66.71% year-on-year (YoY) to RM288.23 million, from RM865.9 million in 2Q19 due to the write-down of completed inventories and impairment of receivables and contract assets.

The developer posted a loss per share of 1.2 sen in the three months, against three sen earnings per share in April to June 2020.

For the first half of the year (1H20), SD Property recorded a net loss of RM67.61 million, compared to RM470.33 million net profit in the same period last year.

Revenue for January to June 2020 declined 47.22% YoY to RM764.96 million from RM1.44 billion in 1H19.

The corresponding period in the financial year 2019 had also included one-off gains through land sales totalling RM147 million and disposal of assets totalling RM208.8 million.

The property development segment registered a loss of RM89.55 million in 1H20 compared to RM248.56 million profits in the corresponding period of the previous year, due to a review of development projects and launches, a write-down of completed inventories, write-off of development expenditure and impairment of other assets totalling RM98.2 million.

For the six months, the property investment segment recorded a loss of RM4.47 million compared to a profit of RM8.36 million in 1H19, largely due to the closure of assets and reduced occupancy rates, as well as the impact of rental rebates during the enforcement of the Movement Control Order (MCO).

SD Property said the segment was further dampened by the pre-opening expenditure incurred for the KL East Mall in Taman Melawati.

Meanwhile, the leisure segment registered a loss of RM15.77 million in 1H20 compared to a loss of RM8.61 million in the corresponding period of the previous year, mainly attributed to the closure of TPC Kuala Lumpur and Sime Darby Convention Centre during the MCO.

“In navigating the uncertainties and aligning to the current market sentiment, we have reviewed the product pipeline and will continue to ensure the right products at the right price points are offered to our customers,” SD Property group MD Datuk Azmir Merican said in a statement yesterday.

“The group remains focused on clearing its inventories of completed unsold products and intensifying marketing and sales efforts,” he added.

Riding on the Home Ownership Campaign, the group will intensify its marketing efforts and secure signed sales through bookings conversion.

SD Property’s bookings stand at RM1.1 billion as at July 31, 2020, while its unbilled sales is at RM1.5 billion and targeted pipeline of new launches totalling RM1 billion.

In the near term, the group focused on maintaining its financial discipline through cost rationalisation initiatives as well as cashflow and inventory management.