ARA DAMANSARA, 25 NOVEMBER 2020 – Sime Darby Property Berhad (“Sime Darby Property” or “the Group”) released its results which saw the Group posting a revenue of RM592.6 million for the third quarter, an increase of 105.6% compared to the preceding quarter, and RM1,357.6 million for the nine-month period under review ended 30 September 2020.
The Group, however, recorded a loss of RM358.6 million for the third quarter and RM456.0 million for the nine-month period under review, mainly due to impairment of inventories at the Battersea Power Station project (“Battersea project”) and the Property Development segment.
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 (“PBIT”) of RM92.6 million for the third quarter, representing an increase of more than four-fold, and RM63.7 million for the nine-month period under review.
Improved business segments’ performance compared to the preceding quarter
The operating performance of the Property Development segment improved significantly to a profit of RM110.2 million as 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.
The Group’s Investment and Asset Management segment also recorded improvement and registered a higher revenue of RM17.0 million and marginally lower loss of RM4.6 million as compared to a loss of RM5.0 million in the preceding quarter. The segment performance, albeit vulnerable to the Covid-19 pandemic, has improved in line with the resumption of activities and cessation of rent concessions for the quarter under review.
The Leisure segment recorded a profit of RM1.4 million as compared to a loss of RM10.4 million in the preceding quarter, mainly due to higher revenue from golfing and membership as well as an increase in events and functions.
The Group’s quarterly result was impacted by the share of impairment loss of RM337.1 million (GBP62.4million) from Battersea Project Holding Company Limited and its subsidiaries, a 40% owned joint venture of the Group, in respect of the Battersea project in London, and the impairment of inventories of RM97.8 million.
The said impairment from the Battersea project was due to the challenges presented by the Covid-19 pandemic in the United Kingdom which had an impact on the delivery of the project. Notwithstanding the impact of Covid-19 on the global market, it is encouraging to note that the Battersea project continues to maintain good momentum with respect to both residential sales and commercial leasing where agreements for leases have been entered into with leading brands.
“Our third quarter operating performance demonstrates the stability of our core business segments and the resilience of our organisation, as shown in the improved core results compared to the previous quarter. I am pleased to report that within the nine-month 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,” said Sime Darby Property Group Managing Director Dato’ Azmir Merican.
He added, “Acknowledging the ongoing Covid-19 pandemic, we have initiated the process of proactively assessing the value of our assets to ensure prudent measures are in place to reflect the evolving market conditions. Given the uncertainty with respect to 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.”
The Group also declared a first interim dividend of 1 sen per share for the financial year ending 31 December 2020. The dividend will be paid on 22 December 2020 to shareholders of record on 10 December 2020.
Future growth prospects remain strong
Riding on the national Home Ownership Campaign (“HOC”) that was reintroduced in June 2020, the Group has intensified its marketing and sales efforts garnering total bookings of RM1.1 billion, as at 31 October 2020. Take-up rates have been encouraging, with launches of residential homes such as Elmina Green Three and Serenia Ariya achieving 100% take-up on the launch weekend.
Aligned with the Group’s plan to broaden the funding structure for its working capital and to support future business growth, the Group has also revised its RM4.5 billion Islamic Medium Term Notes Programme based on the Shariah principle of Musharakah (“Sukuk Musharakah Programme”) to incorporate terms for the potential issuance of ASEAN Sustainable and Responsible Investment (SRI) Sukuk with a credit rating of AA+IS and a stable outlook accorded by Malaysian Rating Corporation Berhad (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 RM4.5 billion Sukuk Musharakah Programme.
The Group’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.
About Sime Darby Property Berhad
Sime Darby Property is Malaysia’s largest property developer in terms of land bank with 19,850 acres of remaining developable land. With over 47 years of successful track record of developing sustainable communities, Sime Darby Property has to date built 24 active townships and developments with a global reach that encompasses assets and operations in the United Kingdom. In the UK, as part of a Malaysian consortium, Sime Darby Property is the developer of the iconic Battersea Power Station Project in central London.
Sime Darby Property is a multi-award winning property group with numerous local and international accolades. It is the first Malaysian property developer to be awarded the International FIABCI Prix d’Excellence Awards twice for its Subang Jaya and UEP Subang Jaya townships. The company bagged its 10th consecutive Gold at the Putra Brand Awards 2019 and its 6th consecutive Top 10 Developers Awards at the BCI Asia 2015. Sime Darby Property has also been recognised as among the top developers in Malaysia in the annual The Edge Top Property Developers Awards, a recognition which the company consistently receives since 2009.
Acting Head, Corporate Communications
Sime Darby Property Berhad
Mobile: 019-218 0792
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