Higher earnings for Sunway in Q3 FY17

KUALA LUMPUR: Sunway Bhd's earnings rose 5% to RM150.85mil in the third quarter ended Sept 30, 2017 from RM143.60mil a year ago, aided by stronger revenue growth, though property development was sluggish.

It reported on Monday revenue increased by 16% to RM1.32bil from RM1.13bil a year ago due to higher contribution from most business segments, particularly the property investment, construction and trading and manufacturing segments.

However, profit before tax (PBT) fell 5.7% to RM196.70mil from RM208.54mil due to the property development and quarry segments which registered lower profits,” it said. Its earnings per share were 7.38 sen compared with 7.02 sen.

“The property development segment reported revenue of RM162.2mil and PBT of RM35.5mil in the current quarter compared to revenue of RM247.6mil and profit before tax of RM62.2mil a year ago,” it said.

 It pointed out this was a decline of 34.5% in revenue and PBT of 43% mainly due to lower sales and progress billings from local development projects.

Sunway said its property investment segment reported an 18.7% increase in revenue of RM225.4mil and 9% rise in PBT of RM50mil. 

The higher revenue was mainly contributed by additional revenue from the new Sunway Velocity Mall, which was opened in December 2016 and higher revenue from Sunway Pyramid Hotel which was re-opened progressively in 2017 following a refurbishment exercise in 2016. 

Although profit contribution from the new Sunway Velocity Mall was not expected to be positive during the initial rental period due to higher rebates given in the current competitive market condition, the current PBT was still higher due to better contribution from the other operations.

Sunway said the construction segment recorded a 44.7% rise in revenue of RM416.6mil and a 27.5% increase in PBT of RM41mil due to higher progress billings from local construction projects and lower intra-group eliminations.

As for its trading and manufacturing segment, revenue rose by 41.7% to RM292.9mil and PBT increased by 95.3% to RM14.2mil due to better overall market condition and sentiment, which resulted in higher sales and profit for the segment, both locally and overseas.

It pointed out the quarry segment's revenue fell 6.9% to RM50.3mil and PBT slumped 63.2% to RM2.5mil mainly due to lower sales volume for aggregates and premix. Performance was also impacted by temporary halt in operations at one of its sites due to closure of the access road.

Sunway's other segments posted a 13.7% rise in revenue of RM172.2mil mainly due to higher contribution from the healthcare and building materials segments but PBT dipped 1.3% to RM53.5mil

For the nine-month period, earnings rose by 13.9% to RM455.71mil from RM400mil in the previous corresponding period while revenue climbed 7.3% to RM3.65bil from RM3.36bil.

“While the property sector is still consolidating, the general market outlook of the other business segments within the group is positive. Barring any unforeseen circumstances, the Group is expected to continue to deliver satisfactory performance in the last quarter of 2017,” it said.