KUALA LUMPUR (Nov 25): Sime Darby Property Bhd posted its second straight quarterly loss in the the third quarter ended Sept 30, 2020 (3QFY20) as it took a RM337.1 million impairment charge for its 40% share of the Battersea Power Station project in London, the UK after the Covid-19 pandemic impacted the delivery of the project.

It also wrote down/wrote off inventories in the property development segment totalling RM97.8 million during the quarter. 

The group’s net loss widened to RM355.26 million from RM81.77 million for 2QFY20. This was despite revenue more than doubling to RM592.63 million from RM288.23 million in the same period. The group posted a net profit of RM25.24 million on a revenue of RM850.03 million for the corresponding period of the previous year.

But stripping out the impairment of inventories, Sime Darby Property said its profit before interest and tax increased more than fourfold quarter-on-quarter to RM92.6 million for 3QFY20.

For the cumulative nine-month period ended Sept 30, 2020 (9MFY20), the group’s net loss stood at RM422.87 million against a net profit of RM495.58 million a year ago, while revenue declined 40.7% to RM1.36 billion from RM2.29 billion for 9MFY19. Likewise, the loss-making nine-month period was mainly attributable to the group’s share of impairment loss from the Battersea project. 

Despite a weak financial performance, the property developer declared its first interim dividend of one sen per share for the financial year ending Dec 31, 2020 (FY20), payable on Dec 22.

Sime Darby Property group managing director Datuk Azmir Merican Azmi Merican said it achieved total sales of RM1.3 billion in 9MFY20. The group expects to exceed its sales target for FY20 of RM1.4 billion as the government has relaunched the Home Ownership Campaign, giving homebuyers some key financial incentives, for the period of June 2020 to May 2021. 

“Acknowledging the ongoing Covid-19 pandemic, we have initiated the process of proactively assessing the value of our assets to ensure prudent measures are in place to reflect evolving market conditions. Given the uncertainty with respect to the pandemic and its related economic consequences, assessments will continue to be made to ensure the group is on a stronger footing as the overall economic environment gradually recovers,” he said in a statement today.

He added that the group’s unbilled sales of RM1.5 billion as at Sept 30, 2020 put it in good stead to ride out market uncertainties.

Sime Darby Property also said it is mindful of challenges presented to the Battersea project as a result of Covid-19 and Brexit, adding that it is closely monitoring its investment and cautiously optimistic about the project’s long-term potential.

At 3.16pm, its share price was up half a sen or 0.89% at 56.5 sen, valuing it at RM3.84 billion. Year to date, the counter has fallen 38% from 91 sen.