Sime Darby Property Group registered revenue of RM1.4 billion for the six months ended 30 June 2023 (“, marking a 25% increase from the RM1.1 billion in the same period a year ago. The group’s gross profit margin exceeded expectations by 28%, with profit before tax at RM212.2 million, and profit after tax and minority interest at RM131.7 million, reflective of the more competitive and dynamic market environment.
Fuelled by the progress of its ongoing projects, the Group registered a higher revenue at RM688.9 million compared to the preceding quarter. PBT improved 17% Quarter-on-Quarter to RM114.3 million while PATAMI also improved 17% to RM71.1 million.
However, net profit for the quarter and 1H dropped registering RM78.8 million and RM140 million respectively.
Capitalising on market opportunities, the Group recorded sales totalling RM1.5 billion, which represents 65% of its RM2.3 billion sales target for FY2023. The industrial segment was the key contributor with 40% or RM597.0 million of total sales achieved in H1 FY2023.
Sime Darby Property Group Managing Director, Dato’ Azmir Merican, said, “In the face of current market dynamics, our strategy is rooted in understanding market nuances and consumer demand. This has allowed us to pivot effectively and capitalise on areas of growth while maintaining consistency in our offerings. This balance has been crucial for our continued sales and operational growth trajectory in H1 FY2023.”
Further to its operational excellence, the Group won an impressive 33 awards in H1 FY2023, with two major wins for its City of Elmina and Cantara Residences at the 2023 FIABCI World Prix d’Excellence Awards held in the United States.
On 21 August 2023, the Group completed its second Sukuk issuance under the Sukuk Musharakah Programme with a nominal value of RM600 million. The issuance attracted significant attention from a diverse group of fixed-income and high-calibre investors, reaching an
oversubscription of more than eight times and accumulating an order book valued at over RM4.8 billion, a testament of the market’s confidence in our fundamentals.
H1 FY2023 vs H1 FY2022
The Property Development segment registered a robust 27% YoY revenue growth, reaching RM1.3 billion as compared to RM1.0 billion last year. The segment’s resilient performance was largely due to a combination of stronger sales and profit contribution from both industrial and
residential products.
Concurrently, PBT reflected a 6% increment, translating to RM204.2 million, reflecting the increase in on-site development activities in Bandar Bukit Raja, Nilai Impian, Elmina Business Park, and Serenia City townships.
The IAM segment’s revenue was also higher at RM52.5 million in H1 FY2023 driven by growth in retail sub-segment specifically KL East Mall which recorded an increase in occupancy rate from 81% to 86%. However, its PBT was lower at RM7.5 million from RM27.2 million, mainly due to a higher share of loss from joint ventures.
H1 FY2023 Launches and Sales
As the nation’s leading property developer, Sime Darby Property continues to build on its strengths specifically on its successful and thriving townships, which are strategically positioned to offer best-in-class products with functional layouts and excellent amenities.
During the first half of FY2023, the Group unveiled new projects valued at RM2.1 billion, which represents 70% of our full year launch target of RM3.0 billion.
The offerings were diversified to meet market needs: 49% in residential landed, 30% in residential high-rise, 18% in industrial and 3% in commercial. The overall take-up rate of all products currently stood at 82%.
As at 20 August 2023, residential landed products recorded an average take-up rate of 80%. Emilia Phase 1 and 2 in Nilai reported impressive take-up rates of 100% and 98%, respectively.
The residential high-rise products reported an average take-up of 73% on the heels of two launches, namely Teja in Subang Jaya City Centre (“SJCC”) and Serasi Residences in Putra Heights, at the tail end of H1 FY2023.
The Group’s industrial products achieved an average take-up rate of 88%, with contributions mainly from The Prestige Collection Signature Factories in Elmina Business Park and industrial offerings in Bandar Universiti Pagoh – both fully sold. Similarly, XME Business Park Phase 2C in Nilai Impian recorded a 94% take-up.
Financial and Operational Achievements
Completed inventories reduced significantly to RM237.7 million from RM277.2 million as at 31 December 2022, the lowest level ever achieved since its demerger. The Group registered cash reserves of RM795.4 million, while net gearing ratio of 20.7% reflects strong cashflow and capacity for future expansion.
The Group posted higher unbilled sales of RM3.8 billion as at 30 June 2023, versus RM3.6 billion as at 31 December 2022 ensuring revenue visibility for the next three years. Current bookings stood at RM1.9 billion as at 6 August 2023.
Dividend
Sime Darby Property declared its first interim dividend of 1.0 sen dividend per share for the financial year ending 31 December 2023 amounting to a payout of RM68.0 million.
Outlook for FY2023
Confident that the strong momentum seen in the first half of 2023 will continue into the second half of the year, the Group has revised its sales target of RM2.3 billion to RM2.7 billion and the GDV launch target of RM3.0 billion to RM4.0 billion.
