Sime Darby Property targets RM1.4b in sales for FY2020

PETALING JAYA (Aug 27): Sime Darby Property is setting a lower sales target of RM1.4 billion for financial year 2020 ending Dec 31, 2020 owing to the Covid-19 pandemic.

During the 2Q2020 financial results media briefing here today, Sime Darby Property group managing director Datuk Azmir Merican (pictured) said that he expects the group’s total sales to be 30% to 40% lower than FY2019.

“We are targeting a 30% to 40% lower sales target compared to FY2019, which translates to about RM1.4 billion,” he said.

As at 1HFY2020, Sime Darby Property achieved RM712.5 million sales with 754 units sold mainly from landed residential properties in township developments. The total unbilled sales remained stable at RM1.54 billion as at June 30, 2020.

“About 90% of the unbilled sales will be recognised by FY2021,” said Azmir, adding that the secured total bookings as at July 31, 2020 stands at RM1.1 billion.

“One of our focus areas for FY2020 is to convert the bookings into sales. We are also focusing on introducing the right products in the right price range, intensifying marketing efforts and clearing unsold inventories,” he noted.

As at 1HFY2020, the unsold gross development value (GDV) is RM2.4 billion (2,578 units), which is largely not from new launches (GDV RM1.08 billion or 1,197 units).

Nonetheless, the group has garnered an 84% average take-up in 1HFY2020.

“For the rest of FY2020, the group will remain focused on launching landed residential products, within the right price range in our flagship township developments,” Azmir shared.

Some of the upcoming landed residential launches are Elmina Green 3A & 3B in Elmina West, Lumira 2 in Bandar Bukit Raja, Ariya in Serenia City, Embun 2 in Bandar Ainsdale and new phases in Putra Heights as well as Elmina East.

“We have slightly more than RM1 billion GDV worth of projects to roll out in the remaining FY2020,” he said.

Moving forward, Azmir foresees a gradual economic recovery as a result of the government’s various stimulus packages and policies such as the Home Ownership Campaign 2020 and the revised overnight policy rate at 1.75%.

“In the near team, the group remains focused on maintaining its financial discipline through cost rationalisation initiatives as well as cash flow and inventory management. We will continue to focus on developing mid-range and affordable residential products as the category is still dominating the market,” Azmir noted.

He added that the group will also be focusing on industrial property sector as it is expected to continue being a “beacon” for the local property segment.

“We have planned to roll out RM4.3 billion GDV of industrial products between FY2020 to FY2030 situated in Elmina, Serenia City, Bandar Bukit Raja, Nilai Impian and Bandar University Pagor. As at June 30 this year, our industrial property segment has contributed 12.3% of our total sales achieved,” Azmir offered.

Sime Darby Property suffered a net loss of RM81.8 million for the 2QFY2020 from a net profit of RM205.26 million in 2Q2019. Revenue also slipped to RM288.23 million from RM865.90 million previously.

For the 1HFY2020, Sime Darby Property recorded a net loss of RM67.61 million versus a net profit of RM470.33 million in 1H2019, while revenue shrank to RM764.96 million from RM1.44 billion previously.

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