This article first appeared in The Edge Financial Daily on May 23, 2018
KUALA LUMPUR: Property developer UEM Sunrise Bhd posted an 8.5% increase in net profit to RM25.29 million in the first quarter ended March 31, 2018 (1QFY18) from RM23.31 million a year ago, on higher net contribution from associates and joint ventures, albeit a lower operating profit driven by lower revenue.
Earnings per share rose to 0.56 sen compared with 0.51 sen a year ago. Quarterly revenue, however, fell 31.5% to RM287.74 million in 1QFY18 from RM420.34 million in 1QFY17.
In a filing with Bursa Malaysia yesterday, UEM Sunrise attributed the lower quarterly revenue to the completion of Teega, Arcoris and Residensi 22 in the prior year, while in 1QFY18, the new launches of Residensi Solaris Parq in Dutamas, Serimbun in Iskandar Puteri, Johor and Kondominium Kiara Kasih in Segambut were still at the initial stage of development.
“Nonetheless, the impact of this project development progress cycle, to a certain extent, is cushioned by the completion of a land sale in the current quarter under review and good construction progress from the Almas, Sefina and Estuari projects,” it said.
In a separate statement, UEM Sunrise said its property development sales achieved in 1QFY18 was RM434.3 million, up 156% from RM169.4 million in 1QFY17.
“Thirty-nine per cent of the total property development sales was contributed by the central region, largely from Residensi Solaris Parq, Kondominium Kiara Kasih and Symphony Hills in Cyberjaya,” it said.
“Another 37% of the property development sales was from the company’s international projects — Mayfair and Conservatory in Melbourne, Australia, while the remaining 24% was from the southern region, mainly from Serimbun near Bukit Indah followed by Estuari Gardens in Puteri Harbour and Denai Nusantara, all in Iskandar Puteri, Johor.”
To date, UEM Sunrise has launched projects with a total gross development value (GDV) of RM356.8 million.
On prospects for the current financial year ending Dec 31, 2018 (FY18), UEM Sunrise said it remains prudent in its sales and GDV targets of RM1.2 billion and RM1 billion respectively for 2018 and is ready to activate further launches depending on market conditions.
The group’s unbilled sales stood at RM4.8 billion as at March 31, 2018.
“We are aware of the market’s needs for more mid-market and affordable residential products within strategic locations and have devised our deliverables to meet such expectations, which proved to be effective as seen in the sales performance of Serimbun and Kondominium Kiara Kasih,” said UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib in the statement.
“Having said that, our focus is not only on affordable and mid-market products. As a diverse property developer with a portfolio encompassing townships, high-rise residences and mixed commercial developments, including properties from the affordable market segment to mid- and high-end segments, we have the flexibility to change our product mix to suit demand,” he added.