KUALA LUMPUR: Sime Darby Property Bhd posted profit before interest and tax (PBIT) of RM92.6mil in the third quarter ended Sept 30,2020 excluding impairments.
It said on Wednesday the PBIT was up more than four-fold. Its revenue increased by 105.6% to RM592.6mil from the preceding quarter. It declared an interim dividend of one sen per share.
However, it posted net loss of RM355.26mil mainly due to impairment of inventories at the Battersea Power Station project and the property development segment.
For the nine months ended Sept 30,2020, it recorded net loss of RM422.87mil due to the impairments while its revenue was RM1.35bil.
This compared with net profit of RM495.57mil on a revenue of RM2.29bil in the previous corresponding period. Excluding the impairments, its PBIT was RM63.7mil in the nine months ended Sept 30,2020.
Commenting on the 3Q, the property development segment reported profit of RM110.2mil versus a loss of RM5.1mil in 2Q, excluding the impairment of inventories.
Underpinning the improvement were 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 recorded higher revenue of RM17mil and marginally lower loss of RM4.6mil versus RM5mil loss in 2Q
“The group’s quarterly result was impacted by the share of impairment loss of RM337.1mil (GBP62.4million) from Battersea Project Holding Company Ltd 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 RM97.8mil, ” it explained.
The impairment from the Battersea 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.
Notwithstanding the impact of Covid-19 on the global market, Sime Property said 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.
Sime Darby Property group managing director Datuk Azmir Merican said the 3Q operating performance demonstrated the stability of its core business segments and the resilience of the organization. These were reflected in the improved core results compared with 2Q.
“Within the nine-month period, we have achieved a total sales of RM1.3bil and I am confident to exceed our revised annual sales target of RM1.4bil.
“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, ” Azmir said.
Sime Property said the group’s resilient financial position and revenue visibility, supported by a moderate net gearing level of 0.26 times and unbilled sales of RM1.5bil, put it in good stead to ride out market uncertainties.
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