Sime Darby Property returns to profitability in FY19

Last update: 26/02/2020

KUALA LUMPUR, Feb 26 -- Sime Darby Property Bhd posted a net profit of RM598.53 million for the financial year ended Dec 31, 2019 (FY19), reversing a net loss of RM238.46 million a year ago, thanks to higher contributions from its core business of property development and one-off gains of RM245.5 million from the disposal of properties.

In a statement today, the property developer said revenue for FY19 surged 30 per cent to RM3.18 billion from RM2.45 billion previously.

"Property development segment continued to be the major contributor with results of RM416.9 million for FY19, an improvement of 597.6 per cent. The results also included gains of RM138.2 million from compulsory acquisition and non-strategic land sales," it said.

The property developer said growth from its property development segment was the mainly contributed by City of Elmina, Bandar Bukit Raja, Serenia City, Putra Heights, KL East, and Cantara Residences.

For the fourth quarter ended Dec 31, 2019 (Q4 2019), the company also returned to the black with a net profit of RM102.96 million against a net loss of RM347.50 million earlier, while revenue improved to RM888.93 million versus RM788.81 million previously.

Meanwhile, Sime Darby Property said it had exceeded its sales target for 2019, achieving total sales of RM3.1 billion for the year, 35 per cent higher than its target of RM2.3 billion.

"We launched 2,917 units with a combined gross development value (GDV) of RM2.3 billion in the year, while total unbilled sales was RM1.6 billion as at Dec 31, 2019," it added.

On outlook, the group expected property market 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 outbreak which may affect consumer sentiment," it said.

However, it expected the government's plan to unveil a stimulus package to mitigate the adverse economic impact should contribute towards maintaining investor confidence and market sentiment.

Moving forward, it said the group would focus on growing its core development business despite the challenges, and would 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, as well as to expand further into industrial and logistics developments to increase recurring income," it added.

Sime Darby Property also declared an interim dividend of 2.0 sen per share for FY19, payable ?on April 20, 2020.