Sime Darby Property’s 1Q profit up 33.5%, to reassess RM4 bil sales target amid cost pressures

PETALING JAYA (May 27): Sime Darby Property Bhd posted a 33.5% increase in net profit for the first quarter ended March 31, 2026 (1QFY2026), supported by stronger margins and a RM65.1 million fair value gain on an investment property despite lower revenue.

According to its filing with Bursa Malaysia yesterday, net profit rose to RM163.0 million from RM122.2 million a year earlier, while profit before tax climbed to RM236.3 million from RM179.6 million. Revenue eased to RM799.2 million compared with RM871.6 million in 1QFY2025, reflecting timing differences in handovers and a different product mix. 

Profit attributable to ordinary equity holders of the company came in at RM158.8 million versus RM118.4 million previously, with basic earnings per share improving to 2.33 sen from 1.74 sen. No dividend was declared for the quarter and net assets per share stood at RM1.55.

The results incorporate a RM65.1 million gain arising from a change in the fair value of an investment property, recognised in accordance with Malaysian Financial Reporting Standard (MFRS) 140. 

The asset, a purpose-built data centre at Elmina Business Park in Rawang, Selangor, has been valued at RM1.5 billion by independent valuer CBRE WTW Valuation & Advisory Sdn Bhd, which increased the group’s net assets per share by about 0.96 sen.

Sales reach RM918.9 mil; industrial segment largest contributor

Operationally, Sime Darby Property booked RM918.9 million in sales for the quarter, representing about 23% of its RM4 billion full-year sales target for FY2026.

Industrial products were the largest contributor, delivering RM487.0 million or 53% of total sales as the group continued to tap demand for logistics and industrial assets within its township landbank. Residential landed properties contributed RM219.7 million, while high-rise residential projects added RM157.6 million. Commercial products made up RM52.6 million.

Unbilled sales stood at RM4.1 billion as at March 31, 2026, providing earnings and cash flow visibility over the next three years. Sime Darby Property, which surpassed RM4 billion in annual sales for a second consecutive year in FY2025, has launches planned for FY2026 with an estimated gross development value of RM4.7 billion across domestic and international markets.

RM4 bil sales target to be reassessed

At a media briefing yesterday, as reported by The Edge Malaysia, group managing director and chief executive officer Datuk Seri Azmir Merican said Sime Darby Property is maintaining its RM4 billion sales target for now, but will reassess the figure at its upcoming mid-year review in light of rising construction costs and more cautious buyer sentiment.

“I want to be pragmatic and transparent. As we enter our mid-year review cycle, I will gather feedback from the senior management team. Typically, any revision would be made when we announce our second-quarter results, but as of today, we still hope to pursue the RM4 billion sales target,” he said.

Azmir noted that cost pressures have intensified across the construction sector, with contractors increasingly seeking compensation for higher input costs.

“Most contractors have written to us to highlight the additional costs they have incurred, and we are currently in the middle of negotiations,” he said. “As you know, our contracts are fixed-fee, but being practical, we know that we have to also be responsible as developers. For future projects, this is where we need to look at costing again.”

He added that higher diesel prices, building material volatility and supply chain disruptions have increased construction costs, complicating pricing decisions, particularly for mass-market products.

“For the projects we have launched, we are unable to pass the cost to customers,” Azmir said. “For projects that we are launching, we are doing a couple of things. One is to look at the price and rationalise the design, so we can retain healthy margins and at the same time continue to launch the product at a sensible and attractive price.”

LTIP proposal and EGM

Separately, Sime Darby Property has proposed the establishment of a long-term incentive plan (LTIP) comprising performance and/or restricted share grants of up to 5% of its issued ordinary shares for eligible executive directors and employees of the company and its non-dormant subsidiaries.

The proposals, which include a specific allocation of up to 8 million new shares under the 2026 grant to Azmir in his capacity as group MD and CEO, will be tabled for shareholder approval at an extraordinary general meeting scheduled for June 10, 2026.

Editor’s note: This story is compiled from Sime Darby Property Bhd’s 1QFY2026 financial results and related announcements lodged with Bursa Malaysia, as well as remarks by the group managing director and CEO at a media briefing.

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