UEM Sunrise posts higher earnings

Company says property development sales go up by 156% to RM434.3mil

PETALING JAYA: UEM Sunrise Bhd’s earnings rose 8.4% to RM25.28mil in the first quarter ended March 31, from a year ago due to lower operating costs, higher income and net contribution from associates and joint ventures.

The property developer announced that earnings were higher than the RM23.31mil recorded a year ago.

Its revenue, however, fell by 31.5% to RM287.74mil from RM420.33mil a year ago. Earnings per share were 0.56 sen compared with 0.51 sen.

UEM Sunrise said property development sales had increased by 156% to RM434.3mil from RM169.4 mil. It added that 39% of the sales was contributed by the central region largely from Residensi Solaris Parq in Dutamas, Kondominium Kiara Kasih in Segambut and Symphony Hills in Cyberjaya.

Kondominium Kiara Kasih is the company’s first Rumah Wilayah Persekutuan in collaboration with the Federal Territories Ministry. Priced at RM300,000 per unit with built-up area of 850 sq ft, the 719 units development was launched in March.

UEM Sunrise said 37% of the property development sales was from the company’s international projects including Mayfair and Conservatory in Melbourne, Australia.

The remaining 24% was from the southern region of Malaysia, mainly from Serimbun near Bukit Indah followed by Estuari Gardens in Puteri Harbour and Denai Nusantara, all of which are in Iskandar Puteri.

Serimbun, launched in February is UEM Sunrise’s latest mid-market double storey terrace houses in Iskandar Puteri.

Priced from RM630,000 per unit, 215 units were launched with the built-up area of each unit ranging between 1,993 and 2,117 sq ft.

UEM Sunrise said revenue recognition for on-going developments for the first quarter fell 32% to RM287.7mil compared with RM420.3mil a year ago.

It said this was because the development cycles for the new launches were still at the initial stage while Teega, Residensi22 and Arcoris were completed.

“Property development activities contributed a total of RM244.6mil representing 85% of the period’s total revenue with 54% contributed by the southern region mainly from Almas and Estuari Gardens both in Puteri Harbour and Denai Nusantara, while the remaining 46% is from the central region largely from Sefina Residences and Residensi 22 in Mont’Kiara followed by Serene Heights Bangi,” it said.

UEM Sunrise said it was no longer recognising revenue for its international projects based on progress completion and would instead recognise upon completion and settlement in compliance with the adoption of the Malaysian Financial Reporting Standards effective Jan 1, 2018 for property developers.

It said that 4% of the company’s total revenue for the period was from the disposal of pocket land within Iskandar Puteri. Unbilled sales as at March 31 were RM4.8bil.

UEM Sunrise managing director and CEO Anwar Syahrin Abdul Ajib the sales performance of RM434.3mil was “highly positive amid today’s soft property market environment”.

He said interest in its completed properties – Symphony Hills in Cyberjaya, Nusa Bayu and East Ledang both in Iskandar Puteri – has also intensified following its sales campaign “A New Year, A New Home” which started in February.

“Comprising various value proposition, such as Easy Entry, Easy Plan, Easy Move and Easy Privileges, the sales campaign is not only for completed properties, but also for selected ongoing projects.

“These inventory monetisation efforts are expected to enhance cashflow position and at the same time, reduce the level of inventory in our balance sheet,” he said.

The launch of Serimbun and Kondominium Kiara Kasih with total GDV of RM139.3mil in February and RM217.5mil in March contributed nearly RM70mil for the quarter.

So far, total sales, including bookings for both the projects, was about RM184mil with RM100mil expected from Serimbun. He said the take-up rate for Serimbun was 73% while Kondominium Kiara Kasih was 39%.

He said UEM Sunrise remained prudent in its sales target of RM1.2bil and GDV target of RM1.2bil for 2018 and would activate further launches depending on market condition.