Sime Darby Property net profit surges to RM60.6m

Sime Darby Property said the group’s financial resilience is underpinned by unbilled sales of RM1.7bil and total bookings of RM800mil secured as at March 31, 2021.

KUALA LUMPUR: Sime Darby Property Bhd’s net profit surged to RM60.60mil in the first quarter ended March 31,2021 from RM2.72mil a year ago mainly due to the recovery in property development segment.

In announcing its results on Thursday, it said net profit surged by 2,129% in the just ended quarter compared with RM2.72mil a year ago.

Its revenue rose by 23.7% to RM589.48mil from RM476.73mil. Gross profit rose 98.9% to RM158.16mil from RM79.52mil. Earnings per share were 0.9 sen a share.

“The improved financial performance was mainly attributable to the recovery in property development segment as compared to the previous year where the Movement Control Order (MCO), ” it said.

The MCO 1.0 was first implemented by the government of Malaysia to curb the spread of the Covid-19 pandemic.

“The property development segment continued to be the major contributor. The segment registered a significant improvement in performance by RM96.4mil or more than 10-fold increase in contribution as compared to the corresponding period of the previous year, ” it said.

Sime Property said the significant improvement was mainly contributed by higher sales and development activities in City of Elmina, Serenia City, Serini, The Ridge and Senada in the current quarter as compared to a year ago.

In addition, the operating expenses for the current quarter were lower than the corresponding period of the previous year as a result of prudent cost management.

In the previous year, the development activities and the registration of new sales were affected by the implementation of MCO.

In addition, lower gross profit margin was recorded in the corresponding period due mainly to minimal profit derived from sale of land at RM118.7mil in Gold Coast, Australia.

Sime Darby Property also said there was lower share of losses from joint ventures and associates of RM2.5mil was recorded as compared to a loss of RM10.6mil a year ago.

This was due mainly to higher contribution from PJ Midtown and lower marketing expenses incurred by Battersea in the current quarter.

With the opening of KL East Mall in late November 2020, the investment and asset management segment saw an increase in revenue to RM22.4mil, as compared to RM17.4mil a year ago.

However, the segment registered a loss of RM2.6mil as compared to a profit of RM0.5mil mainly due to higher expenditure incurred in respect of the KL East Mall, in line with increase in activities with the opening of the mall.

Sime Darby Property explained it recognised a higher share of losses from a joint venture and lower rental revenue from other investment properties as a consequence of lower occupancy rate and ancillary revenue, coupled with the rent concessions given to tenants.

Its leisure segment registered a revenue of RM14.1mil as compared to RM18.5mil a year ago.

The group recorded commendable financial and operational performance in the first quarter of FY2021 despite the re-imposition of the MCO 2.0 that lasted for almost half of the quarter.

“We achieved RM630.2mil of sales in the quarter, contributing to a revenue and profit before interest and tax of RM589.5 million and RM97.9 million, respectively.

“Two new launches in the quarter garnered an encouraging average take-up rate of over 90 percent. The encouraging results signal the effectiveness of business strategies and planning deployed in response to the challenges brought about by the Covid-19 pandemic, ” it said.

On the outlook, it said the group’s financial resilience is underpinned by unbilled sales of RM1.7bil and total bookings of RM800mil secured as at March 31,2021. Net gearing ratio remains moderate at below 0.30 times.

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