SimeProp 1Q24 profit doubles | The Star

PETALING JAYA: Sime Darby Property Bhd’s (SimeProp) net profit more than doubled in the first quarter ended March 31, 2024 (1Q24) as it hit a record-high 1Q revenue since its demerger from its then parent in 2017.

Net profit for the quarter surged to RM123.6mil from RM60.7mil in 1Q23, translating to an earnings per share of 1.80 sen.

This was mainly backed by the property development segment as well as lower losses from the investment and asset management segment, but was offset by higher losses from the leisure segment.

On the other hand, the property developer’s revenue jumped by 43% y-o-y to RM978.7mil, underpinned by growth from all segments with the most significant contributor being the property development segment which saw a 45.4% y-o-y increase.

This was followed by the investment and asset management segment and leisure segment that recorded a 10.7% y-o-y and 7.6% y-o-y growth respectively.

SimeProp group managing director Datuk Azmir Merican said the industrial segment emerged as the top contributor to its overall sales performance in 1Q24.

“The group’s first quarter performance has outperformed financial and operational expectations. We are actively diversifying our products and income streams,” he said in a statement yesterday.

In a filing with Bursa Malaysia, SimeProp, the country’s biggest developer in terms of landbank, noted the property development segment contributes 94.6% or RM925.6mil of the total group revenue.

The group added the segment’s profit of RM177mil reflects an increasingly diversified product mix with higher contributions from industrial products through recent successful launches and robust sales momentum.

“The remarkable segment results in the current quarter was also driven by sales of residential products with increased on-site development activities in Bandar Bukit Raja, Serenia City, Ara Damansara, Putra Heights, SJ7 and Elmina Business Park townships, coupled with contribution from land monetisation in Kedah,” the filing said.

With the robust industrial segment and general improvement in the residential market, SimeProp anticipates a favourable outlook in the financial year 2024.

Particularly, the group is poised for further growth with the launch of two landmark projects, the highly anticipated signature residences, The Ophera at KLGCC Resort and the Elmina Lakeside Mall.

“These developments reflect our proactive approach to meeting market demands and enriching the lives of our customers. Our strong 1Q24 performance indicates that the group is on the right track with our strategies, product developments and offerings,” Azmir said.

In 1Q24, SimeProp launched products worth RM820.2mil in gross development value (GDV). In Bandar Bukit Raja 3 Industrial Park, industrial lots and two-storey detached factories with a GDV of RM588.7mil were launched, achieving a take-up rate of 60.6% as of April 28.

Further, double storey shop offices worth RM150.2mil in GDV at The Corak in Serenia City had an 86.4% take-up rate as of April 28.

Additionally, the group’s sales grew by 17% quarter-on-quarter in 1Q24 to RM955.9mil, with the industrial segment accounting for the biggest share of 30.2%. Residential-landed and residential high-rise accounted for 26.7% and 24.5%, of the quarter’s total sales respectively.

“Key projects contributing to the strong performance include industrial products in Serenia City, residential landed products such as Elmina Green 7 and The Eight in the City of Elmina, and Serenia Anisa (1 & 2) in Serenia City.

“Additionally, notable contributions were derived from residential high-rise properties, including Hype Residences in Subang Jaya, TRiARA Residences in Ara Damansara and Serasi Residences (1 & 2) in Putra Heights.”

SimeProp also attributed its sales achievement in 1Q24 to its diverse offerings during the Chinese New Year Dragon Deals campaign, which yielded RM351.8mil of sales bookings for 376 properties.

Unbilled sales stood at RM3.6bil which gives the group earnings visibility for the next three years. The company’s bookings totalled at RM2.4bil with completed inventories registering at RM466.3mil in GDV as of April 28.

“With a healthy cash balance of RM647.1mil and a net gearing ratio of 23.8%, SimeProp is well-positioned for sustained growth and financial stability,” it said.

Meanwhile, SimeProp’s investment and asset management division expanded by 10.7% y-o-y to RM29.1mil in 1Q24 mainly driven by the retail sub-segment, which was supported by an increase in the occupancy rate from 85% to 90% and rising footfall in KL East Mall.

The leisure segment posted a revenue increase of 7.6% y-o-y to RM24mil in 1Q24 due to higher revenue contributions from memberships and golfing activities.

However, the segment registered a loss of RM1.7mil in 1Q24 from a profit of RM1.7mil previously.

The group said this was because of higher depreciation arising from asset review exercise which commenced in the current quarter and will be completed in stages over the remaining financial year.

In April, SimeProp announced it has secured commitment for the remaining 30% of its industrial development fund (IDF) to close at RM1bil.

Azmir said this underscores the confidence and backing from a diverse group of institutional and foreign investors.

“The IDF is a syariah-compliant real estate development fund between Sime Darby Property and LOGOS SE Asia Pte Ltd to develop 177 acres of industrial and logistics assets in Bandar Bukit Raja,” he said.

The counter closed at RM1.07 a share with a market capitalisation of RM7.28bil yesterday. Year-to-date, the share price has witnessed a 73% increase.