KUALA LUMPUR: Sime Darby Property Bhd’s (SDP) net profit dropped to RM28.79 million in the first quarter (Q1) ended September 30, 2018 from RM421.69 million a year ago.
In a filing to Bursa Malaysia today, the property developer said excluding other gains, its segment results slipped 62.5 per cent primarily due to lower share of results from Battersea project in the UK.
It said other gains of RM205,000 consist of net foreign exchange gain while the previous year consists of gains on disposal of the entire stake in Malaysia Land Development Company Bhd and a 40 per cent estake in Seriemas Development Sdn Bhd of RM40.6 million and RM278.2 million respectively.
Its revenue increased marginally to RM480.34 million from RM472.61 million.
SDP said its property development performance had dropped 67.8 per cent due to the share of loss of Battersea of RM5.7 million against a profit of RM86.8 million in the similar quarter of the previous year.
“Profit recognition for Battersea is upon completion and hand over of unit to buyer. Phase 1 of Battersea consisting of 867 units was completed in December 2017 and a total of 855 units has been delivered to the buyers up to 30 June 2018.
“During the quarter, Battersea recognised sales of two units as compared to 431 units in the corresponding period of the previous year,” it said.
SDP expects the results for the financial period ending December 31, 2018 to be satisfactory.
“The Budget 2019, announced by the government has injected greater thrust into the property market, in particular the stance on affordable housing and providing various incentives and support for home ownership.
“The waiver of stamp duties for residential properties valued between RM300,001 to RM1 million per unit, for first-time home buyers would spur the demand of first-time home ownerships and, to an extent, address the existing property overhang in the country.”
Amid the subdued property market, the group launched a total of 284 units during the quarter, with a combined gross development value of RM310.5 million, driven by flagship townships namely Bandar Bukit Raja, Serenia City and Nilai Impian. This was a marginal increase of about 1.1 per cent year-on-year.
“These products were priced strategically in the affordable range of RM200,000 to RM800,000 per unit,” it said.
In the UK, SDP said Battersea Power Station Holding Co Ltd, the group’s 40 per cent joint venture, was on track to enter into agreements for the proposed disposal of Phase 2 Commercial Assets to Permodalan Nasional Bhd and the Employees Provident Fund by the end of 2018, with the target completion by the first quarter of 2019.