Sime Darby Property 2Q18 profit slips 5%

KUALA LUMPUR (Feb 27): Sime Darby Property Bhd’s (SimeProp) net profit in the second quarter ended Dec 31, 2017 (2QFY18) has declined by 5.06% on-year to RM138.08 million from RM145.44 million previously, as higher taxes and lower results of joint ventures mitigated a jump in gross profit.

Also contributing to the decline was the absence of contribution from discontinued operations, Sime Darby Property’s filing showed. Quarterly earnings per share slipped to 2.5 sen, from 3.7 sen in 4QFY17.

Meanwhile, quarterly revenue jumped 65.4% to RM677 million from RM409.35 million in the same quarter last year.

For the six-month period ended Dec 31, 2017 (6MFY18), group net profit soared 90.07% to RM559.77 million from RM294.51 million in the corresponding period the year before.

The property development division saw pre-tax profit rise 60% on-year, added with other gains comprising the gain on disposal of Malaysia Land Development Company Bhd and the 40% equity stake in Seriemas Development Sdn Bhd of RM39.6 million and RM278.2 million respectively.

“In the previous year, other gains consisted of the gain on disposal of Sime Darby Property (Alexandra) Pte Ltd of RM130.3 million,” it said. Half-year revenue also expanded 33.6% to RM1.14 billion, from RM853.71 billion previously.

On prospects, SimeProp sees the domestic property sector continuing to remain sluggish amid weak market sentiments — but only in the short run.

“The medium to longer-term prospects remain positive and the underlying demand for properties in strategic locations and at the right pricing points, especially for landed properties, remain resilient,” it said.

Moving forward, SimeProp is targeting to launch another 1,900 units in Selangor and Johor with combined gross development value (GDV) of RM1.5 billion by year-end. It already launched just under 3,000 units in 1HFY18 with GDV of RM1.9 billion.

“The company is also driving to reduce its unsold inventories through active sales promotions and campaigns,” it added.

Shares of SimeProp slid 2 sen or 1.46% to RM1.35 yesterday, giving the property developer a market capitalisation of RM9.18 billion. —

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