UEM Sunrise posts net profit of RM54.7mil

Under the deal, UEM Sunrise via its unit Sunrise Bhd would invest RM215mil to acquire a 50% stake in WCT

PETALING JAYA: Property developer UEM Sunrise Bhd posted a 34.8% decline in net profit to RM54.7mil for its second quarter ended June 30 compared with the previous corresponding quarter due to a couple of one-off gains recorded a year ago.

The drop in earnings was also because of lower margins recognised in the quarter from additional rebates and discounts and more affordable product offerings, said the company in a filing with Bursa Malaysia.

According to UEM Sunrise, the corresponding quarter last year recorded higher other income from the dividend distribution from a subsidiary under creditors’ voluntary liquidation, and recognition of liquidated ascertained damages from a contractor and interest income.

Nevertheless, it managed to chalk up a higher revenue of RM537.8mil for the said quarter, contributed by the sale of developed land and recognition of revenue from property development in Australia starting from the second half of last year.

For the first half of the year, the company’s net profit was lower at RM57.7mil compared with RM137mil in the previous corresponding period.

It said the lower pre-tax profit in the cumulative quarter was also caused by higher finance costs due to an increase in borrowings and lower interest cost qualified for capitalisation.

Revenue for the first six months was higher at RM795.6mil against RM789.8mil in the same period a year ago.

UEM Sunrise said total property development sales for the period declined to RM427.1mil from RM600.4mil in the same period last year, mainly due to a lower contribution from international sales.

Meanwhile, unrecognised revenue as at June 30 this year stood at RM4.3bil as compared to the RM3.8bil recorded in the same period in 2015.

Going forward, executive director Datuk Izzaddin Idris said sales for the first half of the year had been encouraging.

“Despite the softer property market in Johor, Melia Residences received positive response, given its strategic location and attractive price point.

“We originally intended to launch Phase 1 only, which has 107 units with a gross development value (GDV) of RM66mil, but due to the strong interest, we decided to launch two additional phases, ultimately a total GDV of RM262.8mil with a total of 366 units for 2016. As at mid-August, overall sales inclusive of bookings for Melia Residences was 60%,” he said.

He said the company was encouraged by the strong interest in Camellia, where the double-storey terrace homes were selling at a starting price of RM590,000 per unit with a minimum built up of 2,174 sq ft.

“In the month or so since its launch, sales inclusive of bookings for the 109 units of Camellia’s first phase reached 59% and we are now bringing forward the launch of the second phase.

“Both Melia Residences and Serene Heights Bangi are expected to contribute positively to our sales for the year,” he said in a statement.