Sime Darby Property posts RM56m loss for 4Q


SIME Darby Property Bhd (SDP) made a net loss of RM55.93 million in the fourth quarter ended Dec 31, 2020 (4Q20), compared to a net profit of RM102.96 million recorded in 4Q19, due to loss in its property development, investment and asset management, and leisure business caused by Covid-19 disruptions.

Revenue for the quarter fell to RM705.19 million versus RM888.93 million in 4Q19.

The property developer also made an impairment loss from its stake in Battersea Project Holding Co Ltd and its subsidiaries in the period.

The pandemic in London impacted the delivery of Battersea Power Station leading SDP’s 40% share of the said impairment recognised by the Battersea Group amounting to RM337.1 million (£62.4 million).

“The impairment reflects the impact of prolongation costs associated with the pandemic, notably the implementation of social-distancing measures and the impact of the UK’s lockdown period on the delivery programme of the Battersea project,” SDP noted in its exchange filing yesterday.

SDP added that the group recorded good take-up rates in most of its launches at operational level.

“The group registered close to RM2 billion sales during the year, of which RM1.2 billion or 60% were from townships and integrated development along the Guthrie Corridor, RM500 million or 25% were from other areas within the Klang Valley, while the remaining RM300 million or 15% were contributed by other regions,” it said.

For the full year, SDP posted a net loss of RM478.8 million versus net profit of RM598.53 million in the financial year 2019 (FY19), while FY20’s revenue amounted to RM2.06 billion as against RM3.18 billion in FY19.

SDP recorded a commendable sales achievement of RM2 billion, representing an increase of 43% against its revised sales target of RM1.4 billion.

The impact of the second Movement Control Order is expected to be less severe, but may still pressure the economy and property markets which were on its way to recovery.

For the coming year, however, the group is cautiously optimistic of the prospects for both landed residential and industrial property markets.

“Residential products offered at the right price in our prime townships will attract buyers. The industrial market outlook is expected to be more promising, driven by the increase in logistics and warehouse demand in the booming e-commerce sector.

“The government’s concerted efforts coupled with the historic- low interest-rate environment continue to provide the impetus for growth for the property market,” it said.

The group added that 2021 is viewed as a year of consolidation to strengthen its foothold in the market.

“The group will accelerate growth through key initiatives which include digital transformation, diversification of income into new revenue streams, increased place-making and catalytic components at our townships and sustainability initiatives.

For 2021, the group is ready with an agile launch plan which has a healthy mix of products, largely comprising residential landed products in flagship townships such as City of Elmina, Bandar Bukit Raja and Serenia City, as well as residential high-rise products in Kuala Lumpur Golf and Country Club, it noted in an exchange filing yesterday.

Its industrial and logistics development business is considered as the new growth engine, synergised to its property development business.

The group’s performance is underpinned by RM1.58 billion of unbilled sales as of Dec 31, 2020 and low net gearing of 0.28 time.