Press Release — Sime Darby Property beats sales target, reports improved profit for 2019
Group achieves sales of RM3.1 billion, 35 percent higher than target
Ara Damansara, 26 February 2020 – Sime Darby Property Berhad has exceeded its sales target for 2019, achieving total sales of RM3.1 billion for the year, 35 percent higher than its target of RM2.3 billion.
Sime Darby Property launched 2,917 units with a combined gross development value (GDV) of RM2.3 billion in the year. Total unbilled sales was RM1.6 billion as at 31 December 2019.
The Group reported an improved net profit of RM598.5 million for the year, mainly due to higher contributions from its core business of property development and one- off gains.
Revenue for 2019 rose 30.0 percent to RM3.2 billion compared with RM2.4 billion in the same period a year ago. The Group registered one-off gains of RM245.5 million from the disposal of properties.
Full year segment review
The Property Development segment continued to be the major contributor with results of RM416.9 million for the year ended 31 December 2019, an improvement of 597.6 percent. The results also included gains of RM138.2 million from compulsory acquisition and non-strategic land sales.
Excluding these one-offs, the segment results improved 33.2 percent, driven by higher sales and development activities in Denai Alam, Bukit Jelutong, Nilai Utama, Bandar Bukit Raja, Serenia City, Putra Heights, KLGCC Resort and Cantara Residences.
The Group’s share of losses from joint ventures and associates increased to RM31.4 million as against RM26.8 million in the same period a year ago. This was mainly due to higher marketing expenses incurred by Battersea and lower share of profit from PJ Midtown. Losses in 2018 included the share of RM12.0 million impairment in the Sime Darby Sunrise joint venture.
Profit for the Property Investment segment fell to RM5.0 million from RM54.4 million in 2018. The strong performance in 2018 was mainly due to the higher contribution from concession arrangement.
The Group’s share of result in Sime Darby CapitaLand (Melawati Mall) Sdn Bhd has improved to a profitable position from a loss of RM1.2 million a year ago, thanks to a better occupancy rate of 86 percent versus 81 percent in the previous year.
Outlook for FY2020
The property market is expected to remain soft in 2020 due to the prevailing overhang situation and expiry of the Home Ownership Campaign at the end of last year. The market could weaken further due to the impact of the Covid-19 virus outbreak which may affect consumer sentiment. The government’s plan to unveil a stimulus package to mitigate the adverse economic impact should contribute towards maintaining investor confidence and market sentiment.
The Group will focus on growing its core development business despite the challenges. It will continue to offer properties within the affordable and mid-range price points in strategic locations.
The Group will also continue to monetise low-yielding assets to unlock value and channel the capital into business opportunities with better returns. It will expand further into industrial and logistic developments to increase recurring income.
Sime Darby Property expects its results for the financial year ending 31 December 2020 to be satisfactory.
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