Sim Lian’s net profit plummets 71% to $70.9m

Property development arm is dwindling.

On back of weak property development business, Sim Lian’s profit plunged 71% to $70.9 million in FY16 ended 30 June against $241.2 million in FY15. Slump in office space prices and retail space rentals also dragged profitability.

According to Sim Lian’s statement, group revenue collapsed 52% to $570.9 million FY16 from $1,193.2 million a year ago.

The property development division contributed $86.6 million to the Group's revenue in the fiscal year under review. This was 91% lower than the $914.3 million last year.

Prices of office space dipped further 1.5% in 2Q16, compared to the decrease of 0.3% in the previous quarter. Rentals of retail space also slipped 3.5% in the quarter against a 1.9% decrease in 1Q16.

On top of these, the group suffered foreign exchange loss of $8.2 million in FY16, mainly due to the revaluation of intercompany balances which are not denominated in the functional currency of the respective subsidiaries, Sim Lian explained.