Sime Property expects to return to profitability in first quarter
KUALA LUMPUR: Sime Darby Property Bhd (Sime Property) expects to swing back into the black in the first quarter of this year due to impaired gains and taxes in the final six months of last year.
It reported a net loss of RM318.7 million for the six months ended December 31, 2018 against RM559.77 million profit a year ago.
Managing director Datuk Seri Amrin Awaluddin said the loss was due to high inventory impairments, negative contribution from the Battersea Power Station project in the United Kingdom and higher tax provision.
“Since we have ad- dressed legacy issues via inventory impair- ments, we expect to immediately return to profitability as operationally, our performance is positive,” he said at a briefing, here, yesterday.
Amrin is hopeful of a satisfactory performance this year amid the property market slowdown.
“We are continuously reviewing plans for the year to ensure that our pricing strategy and launches are responsive to market demand.”
In May last year, Sime Property announced partnerships with Japan’s Mitsui & Co Ltd and Mitsubishi Estate Co Ltd to jointly develop and lease industrial facilities with a gross development value of RM530 million in Bandar Bukit Raja, Klang.
So far, Sime Property has received tenancy queries from logistics companies.
“We target that by next year, our recurring income would make up 10 per cent of the group’s pre-tax profit.
“We will continue to launch houses at modest prices of between RM500,000 and RM800,000. Based on unbilled sales of RM2 billion, we have set an internal target of RM2.3 billion sales this year,” he added.
In the six months ended December 31, 2018, Amrin said the company achieved RM1.34 billion sales.
Sime Property has changed its financial year-end to December 31 from June 30.
On the Home Ownership Campaign that starts today, Amrin said it would be a test of the government’s incentives for the property sector.