Sime Darby Property posts net loss of RM81.77 million for second quarter

PETALING JAYA: Sime Darby Property Bhd (SDP) posted a net loss of RM81.77 million for the second quarter ended June 30 (Q2’20), against a net profit of RM205.26 million reported in Q2’19, attributed to losses due to the disruption caused by the Covid-19 pandemic.

Revenue for the period stood at RM288.23 million, a 73.6% decline from RM865.9 million previously.

According to the group’s Bursa Malaysia filing, its property development segment posted a loss of RM94.39 million for the Q2’20, while its property investment segment saw a loss of RM4.99 million and the leisure and hospitality segment was RM10.36 million in the red.

For the first half of the year, the group posted a net loss of RM67.61 million against a net profit of RM470.33 million reported in the same half of the previous year. Revenue for the period fell by 46.9% to RM764.96 million from RM1.44 billion previously.

The implementation of the movement control order (MCO) has led the group’s shift towards going digital, and as a result of various online campaigns conducted from March 25 to July 5, it garnered RM680 million in bookings for the period.

SDP’s managing director Datuk Azmir Merican said the group remains focused on clearing its inventories of completed unsold products.

“Despite the soft market, our campaigns are well received, and the digital marketing strategy has elevated sales performance,” he said in a press release.

To navigate the uncertainties and the current market sentiment, Azmir said, SDP has reviewed its product pipeline and will continue to ensure that the right products at the right price points are offered to its customers.

In regard to the prospects for the remainder of the year, the group anticipates a gradual economic recovery from the various stimulus packages and the policy revisions such as the Home Ownership Campaign 2020 introduced by the government along with the low Overnight Policy Rate of 1.75% to augur well for the property sector.

For the near term, SDP remains focused on maintaining its financial discipline through cost rationalisation initiatives as well as cash flow and inventory management. It will continue to develop mid-range and affordable residential products as the category is still dominating the market.

At the moment, its unbilled sales in hand are at RM1.5 billion along with a targeted pipeline of new launches totalling RM1 billion.

Moving forward, the group acknowledged that the first half 2020 was difficult and challenging; however, based on its strong fundamentals and resilient financial position with net gearing ratio currently at 27%, its long-term position remains healthy.

source https://www.thesundaily.my/business/sime-darby-property-posts-net-loss-of-rm8177-million-for-second-quarter-XC3675066