KUALA LUMPUR, Aug 26 — Sime Darby Property Bhd suffered a net loss of RM81.77 million for the second quarter ended June 30, 2020 (Q2 2020) from a net profit of RM205.26 million in Q2 2019.
Revenue also slipped to RM288.23 million from RM865.90 million previously.
The property developer attributed its performance to the implementation of the movement control order (MCO) and the conditional MCO (CMCO) to curb the Covid-19 pandemic.
“The group’s results were further impacted by the write-down of completed inventories and impairment of receivables and contract assets,” it said in a filing with Bursa Malaysia today.
Sime Darby Property said its property development segment declined significantly, from a profit of RM4.8 million in Q1 2020 to a loss of RM94.4 million in Q2 2020.
“The decline was mainly due to write-down of completed inventories and write-off of property development expenditure for projects, totalling RM89.3 million, following a review of projects in the group’s pipeline launches to ensure that the products are aligned to the market demand,” it said.
Meanwhile, its property investment segment also registered a loss of RM5.0 million compared to a profit of RM500,000 in Q1 2020 due to a drop in revenue, resulting from rent concessions granted to the tenants during the various phases of the MCO, the company said.
“The leisure and hospitality segment also recorded higher loss of RM10.4 million compared to RM5.4 million in the preceding quarter, mainly due to lower revenue from golfing revenue, events and functions with the temporary closure of businesses during the MCO period,” it said.
For the first six months of 2020 (H1 2020), Sime Darby Property’s recorded a net loss of RM67.61 million versus a net profit of RM470.33 million in H1 2019, while revenue shrank to RM764.96 million from RM1.44 billion previously.
On prospects, the group foresees a gradual economic recovery as a result of the government’s stimulus packages and policy revisions, such as the Home Ownership Campaign 2020 and the reduction of the Overnight Policy Rate (OPR) to 1.75 per cent.
“These policies augur well for the property sector and stimulate property purchases as a long-term investment asset class,” it said.
The group recognises that H1 2020 was both difficult and challenging, nevertheless, it has already seen promising signs of economic recovery.
“The group’s long-term position remains healthy, as reflected by our strong fundamentals and resilient financial position with net gearing ratio currently at 27 per cent.
“We therefore have the potential to ride on the improved outlook going into 2021,” it added. — Bernama
