Sales momentum to remain strong in FY2023, but weaker than FY2022, says Sime Darby Property

• “Of course, there is no crystal ball, but I will say sales momentum will still be strong, though it may not be as high as in FY2022,” Sime Darby Property group managing director Datuk Azmir Merican said.

KUALA LUMPUR (Nov 30): Sime Darby Property Bhd said on Wednesday (Nov 30) that it anticipates the group’s sales momentum to continue into the financial year ending Dec 31, 2023 (FY2023), albeit weaker due to the global economic uncertainties in the year ahead.

“Of course, there is no crystal ball, but I will say sales momentum will still be strong, though it may not be as high as in FY2022,” Sime Darby Property group managing director Datuk Azmir Merican said during the property developer’s third quarter of FY2022 (3QFY2022) results briefing.

Azmir said that in line with the expected weaker sales momentum in FY2023, Sime Darby Property’s full-year sales target for the upcoming financial year will be lower than what the group will achieve in FY2022.

“From what we know now, going into the new year we have a sales target. Obviously, this needs to be approved internally, so I can’t share the number for 2023, but I can share with you that it will be lower than what we will achieve in 2022,” he said.

Sime Darby Property achieved RM2.7 billion in sales in the cumulative nine months ended Sept 30, 2022 (9MFY2022), which eclipsed the group’s FY2022 sales target of RM2.6 billion, and marked a 43% year-on-year increase from the RM1.9 billion in sales achieved in the corresponding period in FY2021.

Touching on the headwinds the group expects to weather through in FY2023, Azmir named three core challenges: the continued labour shortage, high building material prices, as well as the interest rate upcycle.

Azmir said that while the labour shortage issue will need more time to be resolved, he noted that based on the current progress it will be resolved “soon”.

“There are workers coming in, we know. Our contractors are getting workers, but it will take time for the whole value chain to settle down and ramp up again. So we must allow for some time,” he added.

Meanwhile, he said that building material prices have “somewhat stabilised”, but added that with the rising interest rate environment worldwide, the prices of goods the group imports may increase.

“[However,] I think one good thing we have is that the elections (15th general election) are over and when we (Malaysia) get down to work and focus on the right things, our economy should be much more positive,” said Azmir.

“So if we get those things right, we will do better and manage headwinds in 2023,” he added.

For 3QFY2022, Sime Darby Property’s net profit surged to RM56.13 million from a net loss of RM5.19 million a year earlier on the back of the group’s quarterly revenue rising 77.94% to RM689.3 million from RM387.38 million.

Meanwhile, for 9MFY2022, Sime Darby Property’s net profit jumped 152.82% to RM212.69 million from RM84.13 million, on the back of 20.78% higher cumulative revenue of RM1.79 billion versus RM1.48 billion previously.

At the noon break on Wednesday, shares in Sime Darby Property were unchanged at 49 sen, giving the group a market capitalisation of RM3.3 billion.