Sime Darby Property 4Q net profit drops 86%, declares 3 sen dividend

KUALA LUMPUR (Aug 28): Sime Darby Property Bhd's net profit plummeted 85.8% to RM46.57 million in the fourth quarter ended June 30, 2018 (4QFY18) from RM327.66 million a year ago, on lower contribution from the property development, property investment, and leisure and hospitality segments.

This resulted in lower earnings of 0.7 sen for 4QFY18 compared with 8.4 sen for 4QFY17.

Quarterly revenue also fell 45.8% to RM617.37 million from RM1.14 billion in 4QFY17.

Nevertheless, the group declared a second interim dividend of 3 sen per share for the financial year ended June 30, 2018 (FY18), payable on Oct 26.

For the full FY18, Sime Darby Property posted a 2.6% increase in net profit to RM640.01 million from RM624.03 million a year ago, mainly due to higher contribution from the concession arrangement segment.

This was despite revenue coming in 9.9% lower at RM2.35 billion in FY18 compared with RM2.61 billion in FY17.

Sime Darby Property said contribution from concession arrangement jumped almost sixfold to RM36.5 million in FY18 from RM6.1 million in FY17.

"The strong performance was largely from supply of teaching equipment, which contributed profit of RM29.6 million (2017: RM6 million). The revenue from this segment consisted of facility and asset management services, following the completion of the construction of the Education Hub on May 2, 2017," it added.

On prospects for the new financial period, which will be for a six-month period ending Dec 31, 2018 (FP2018), Sime Darby Property said the group will continue to focus on the development of landed properties within the affordable range in its key townships in the City of Elmina, Bandar Bukit Raja and Serenia City and the integrated development at Ara Damansara and Subang Jaya City Centre.

Sime Darby Property has announced the proposed change of its financial year-end to Dec 31 from June 30 currently.

"The group has also initiated cost efficiencies during the last financial year, through strategic partnerships/sourcing to drive development profitability and cost efficiencies as part of the transformation journey post the listing of the company in November 2017," it added.

For FP2018, the group aims to launch a total of 1,500 units, equivalent to a combined gross sales value of RM1.1 billion concentrated heavily in properties within the RM400,000 to RM850,000 price range.

The group also sets its targets for sales and unbilled sales for FP2018 at RM1 billion and RM2.2 billion, respectively.

Barring unforeseen circumstances, Sime Darby Property said it expects the results for FP2018 to be satisfactory.

At 4.17pm, Sime Darby Property shares were down one sen or 0.81% at RM1.22, for a market capitalisation of RM8.37 billion. — theedgemarkets.com

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