Sime Darby Property trims loss in Q3, confident of breaching RM2.4b sales target for 2021

A general view of the Sime Darby Property headquarters in Petaling Jaya October 2, 2019. — Reuters pic
A general view of the Sime Darby Property headquarters in Petaling Jaya October 2, 2019. — Reuters pic

KUALA LUMPUR, Nov 25 — Sime Darby Property Bhd trimmed its losses to RM15.79 million in the third quarter, compared with RM359.96 million previously and is optimistic of exceeding the RM2.4 billion sales target for 2021.

The home builder has secured bookings of RM1.7 billion as of November 7, 2021.

Revenue for the quarter ended September 30, 2021, stood at RM388.24 million, compared with RM592.62 million in the same quarter last year, it said in a filing to Bursa Malaysia.

For the cumulative nine months, it posted a net profit of RM64.71 million, compared with a net loss of RM450.241 million last year, while revenue improved to RM1.48 billion versus RM1.35 billion before.

The improved financial performance for the period was mainly attributable to the property development segment which registered strong sales in industrial and residential products.

“We have delivered healthy sales for the group to date and will continue to launch projects at the right location and price points. The group aims to keep up the momentum of 90 per cent average take-up rates in new residential launches for the remainder of the year,” group managing director, Datuk  Azmir Merican said in a separate statement.

Solid cash balance

Sime Darby Property’s financial position remains solid with a cash balance of RM618.9 million and a moderate net gearing ratio of 32.1 per cent as of September 30, 2021.

The group has higher revenue visibility over a longer period, underpinned by unbilled sales of RM2.1 billion to date. Unbilled sales surpassed the RM2.0 billion mark for the first time since 2018 and are expected to increase further.

The sales achievement was led by residential landed products, contributing to 47.4 per cent of the total sales achieved, followed by residential high-rise at 23.1 per cent and industrial products at 15.7 per cent.

Prospects 2021

Sime Darby Property said its prospects for the remainder of the year is more robust following a challenging third quarter.

The company is currently rolling out its remaining planned launches worth RM1.6 billion with a healthy mix of products, including 57.8 per cent residential landed, 25.8 per cent industrial products, and 13.9 per cent residential high-rises.

The expected worth of total launches for the financial year 2021 is RM3.9 billion.

Azmir Merican said “as the economy and property market regain momentum, our strategies will continue to enable us to generate positive financial and operational results for the full financial year.”

“We are focused on achieving our corporate priorities for the financial year 2021 which includes broadening Sime Darby Property’s recurring income over the long term, as seen by our recent venture into industrial development funds,” he added. “We are tapping on the demand of large-scale, modern logistics properties in prime locations and the new partnership with LOGOS Property Group is a significant step for the Group’s long-term game plan in the real estate sector.”

The company did not declare any dividend for the quarter. However, the first interim single tier dividend of 1.0 sen per ordinary share for the financial year ending December 31, 2021, amounting to RM68 million, was paid on November 16, 2021. — Bernama