Sime Darby's Elmina project
KUALA LUMPUR: Sime Darby Property Bhd
's earnings from both continuing and discontinuing operations jumped 183% to RM421.69mil in the first quarter ended Sept 30, 2017 while it expects a gradual pick up in the industry amid a resilient broader economy.
Sime Darby Property, which will be demerged from the group and listed on Nov 30, said on Thursday this was a sharp improvement from the RM150mil a year ago.
Its revenue increased to RM463.77mil from RM444.36mil. Earnings per share were 42.2 sen from 14.9 sen.
It said the group’s results were boosted by other gains which comprise of the gains on disposal of Malaysia Land Development Company Bhd of RM41mil and the disposal of its 40% equity stake in Seriemas Development Sdn Bhd of RM278mil.
In the previous year, other gain comprises the gain on disposal of Sime Darby Property (Alexandra) Pte Ltd of RM130mil.
Sime Darby Property said property development performance improved by 190.7% from a year ago mainly due to the share of profit of Battersea Project Holding Co. Limited of RM87mil (September 2016: loss of RM1mil) and higher contribution from Elmina West, Elmina East and Serenity Cove, Australia which mitigated the lower contribution from Nilai Impian township.
In the last financial year, the Group recognised its maiden contribution from the development of Phase 1 of the Battersea Project upon handover on completion of 338 units. During the current quarter, Battersea handed over a further 431 units of Phase 1.
Township development recorded higher contribution from Elmina West and Elmina East mainly due to higher development activities as compared to last year. Nilai Impian posted lower contribution mainly attributable to the sale of commercial lots in the previous year.
Its project in Gold Coast, Australia, Serenity Cove, registered a profit of RM7mil due to a result of the sale of 13 lots of residential land. No sales were recorded in the first quarter of the previous year.
As for property investment, it posted loss of RM7mil versus a profit of RM8mil a year ago. This was mainly due to the share of loss of RM5mil from Sime Darby CapitaLand (Melawati Mall) Sdn Bhd.
The Melawati Mall was opened in July 2017 and is still in its early gestation period with occupancy of about 60%.
Included in the corresponding period of the previous year were the reversal of impairment of an investment property in the UK of RM8mil and the share of gain on disposal of investment by Shaw Brothers (M) Sdn Bhd of RM5mil.
As for leisure and hospitality, it made a loss of RM7mil versus a profit of RM6mil a year ago due to the reversal of an impairment of property, plant and equipment of RM10mil.
On the outlook, Sime Darby Property said the group was also poised to benefit from the Digital Free Trade Zone (DFTZ), the world’s first outside China, which is expected to propel small and medium enterprises onto the online market place.
The DFTZ will include a regional logistics hub located in Sepang. This is within the group’s Malaysia Vision Valley (MVV”) Project, where about 3,196 acres of the group’s landbank is being planned for Phase 1 development of the MVV Project.
“Notwithstanding the current competitive environment, the Group will leverage on the superior connectivity and strategic location of our landbank in high growth corridors and transport hubs in the upcoming launches.
“The group is prioritising developments based on market demand, focusing on our core strength of township development and improving operational efficiency for higher performance,” it said.
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