Sime Darby Property revises RM4.5b sukuk programme

by HARIZAH KAMEL / pic by TMR FILE

SIME Darby Property Bhd has revised its RM4.5 billion sukuk musharakah programme to incorporate terms for the potential issuance of its Asean Sustainable and Responsible Investment (SRI) sukuk.

The sukuk musharakah programme was given a credit rating of AA-IS and a “Stable” outlook by the Malaysian Rating Corp Bhd (MARC).

MARC had also assigned a “gold” sustainability sukuk assessment to the group’s sustainability sukuk framework, which sets out the guidelines for any future issuance of Asean SRI sukuk musharakah under the programme.

In a statement yesterday, Sime Darby Property said the move is aligned with the group’s plan to broaden the funding structure for its working capital and to support future business growth.

Riding on the national Home Ownership Campaign (HOC) that was reintroduced in June, the group has intensified its marketing and sales efforts garnering total bookings of RM1.1 billion as of Oct 31, 2020.

“I am pleased to report that within the nine-month (9M) period, we have achieved a total sales of RM1.3 billion and am confident to exceed our revised annual sales target of RM1.4 billion,” group MD Datuk Azmir Merican noted in a statement yesterday.

The group added that take-up rates have been encouraging with launches of residential homes such as Elmina Green Three and Serenia Ariya, achieving 100% sales.

Sime Darby Property’s resilient financial position and revenue visibility, supported by a moderate net gearing level of 0.26 times and unbilled sales of RM1.5 billion, puts it in good stead to ride out market uncertainties.

Net profit for the third quarter ended Sept 30, 2020 (3Q20), recorded a loss of RM358.6 million and RM456 million for the 9M period under review mainly due to impairment of inventories at the Battersea Power Station Project in London and the property development segment.

Revenue for the quarter increased 105.6% of RM592.6 million compared to the preceding quarter, and RM1,357.6 million for the 9M period under review.

Excluding the aforesaid impairment of inventories, the group’s operating performance saw an improved result across all its business segments with profit before interest and tax of RM92.6 million for the 3Q, representing an increase of more than fourfold, and RM63.7 million for the 9M period under review.

Regarding the Battersea Project, the group said the share of impairment loss amounted to RM337.1 million from Battersea Project Holding Co Ltd and its subsidiaries, a 40% owned joint venture of the group, and the impairment of inventories of RM97.8 million.

The said impairment from the project was due to the challenges presented by the Covid-19 pandemic in the UK, which had an impact on the delivery of the project.

Sime Darby Property also said the operating performance of the property development segment improved significantly to a profit of RM110.2 million compared to a loss of RM5.1 million in the preceding quarter, excluding the impairment of inventories.

This was driven by higher sales of new launches and ongoing projects as well as on-site development activities in line with the easing of lockdown restrictions.

He added that given the uncertainty concerning the pandemic and its related economic consequences, assessments will continue to be made to ensure the group will be on a stronger footing as the overall economic environment gradually recovers.

Sime Darby Property declared a first interim dividend of one sen per share for the financial year ending Dec 31, 2020, which will be paid on Dec 22.