KUALA LUMPUR: UEM Sunrise Bhd revenue rose by 42% to RM2.91bil in the financial year ended Dec 31,2019 from RM2.04bil a year ago, boosted by property development following the completion of its Melbourne projects.
It said on Monday that 81% of the FY19 revenue was from the completion and settlement of the Aurora Melbourne Central and Conservatory.
In Malaysia, the construction progress of Residensi Solaris Parq, Residensi Astrea, and Kiara Kasih were underway, replenishing the revenue of previously completed projects.
UEM Sunrise said profit after tax and non-controlling interest (PATANCI) was RM224mil for FY2019.
Excluding a one-off full impairment of RM51mil from its 40% equity interest in the Bio-XCell development in the Southern Industrial Logistics Cluster (SILC) in Iskandar Puteri as well as costs related to organisation restructuring in 2019 and unrealised foreign exchange loss amongst others, PATANCI stood at RM303mil.
UEM Sunrise said 81% of the company’s total revenue was from property development activities; 69% from Aurora Melbourne Central and Conservatory, followed by 16% from Central, mainly Symphony Hills in Cyberjaya, Residensi Solaris Parq in Mont’Kiara and Serene Heights Bangi.
The remaining 14% was from the southern region mostly Serimbun, Aspira LakeHomes and Denai Nusantara, in Iskandar Puteri.
“Sales for the year is RM1.134bil including the sale of five industrial plots in SILC. This is a shortfall to the RM1.2bil sales mark as the FY2019 target included the sale of Mayfair in Melbourne, ” it said.
The company divested the Mayfair’s site for A$107mil to unlock its value and free up cash for other investment and venture prospects.
In terms of sales breakdown, more than half of the sales was contributed from the Central region, mainly from Symphony Hills, Residensi Solaris Parq and Residensi Astrea.
The aouthern region contributed 44% largely from Aspira ParkHomes, Estuari Garden and commercial development 68 Avenue, while the remaining 2% is from Conservatory.
“The company launched projects with a total gross development value (GDV) of RM1.2bil in 2019 and as at Dec 31,2019, its unbilled sales stood at RM1.8bil, ” it said.
Commenting on the financial results, Anwar Syahrin Abdul Ajib, managing director/chief executive officer of UEM Sunrise said: “We are pleased with our results having improved our revenue by 42% to RM2.9bil, largely supported by the strong settlement of Aurora Melbourne Central which accounted for RM1.3bil of the total revenue, and a settlement rate of 97% to-date.
“We still have around A$36mil pending settlement in addition to A$125mil from the en-bloc disposal of its serviced residential component to Scape Australia Management Pty Ltd, the largest asset owner and investor of the purpose-built student accommodation sector in Australia, which is expected to complete in April 2020.
“We also plan to retain the retail component valued tentatively at A$42mil for recurring income purposes. Conservatory is 99% sold with a settlement rate to-date of 89%. Around A$43mil is still pending settlement.
“We are confident that we should be able to achieve full settlement for both Aurora Melbourne Central and Conservatory by year end.”
Anwar Syahrin said UEM Sunrise's gearing has improved tremendously with the completion of the Australian projects as the financing for both have been fully settled, improving the net gearing to 0.32 times.
“Our prudent management of cash gave us a healthy cashflow allowing us to focus on other potential investments since we are in the position to take on bigger and more profitable ventures, ” he said.
On sales contribution, he said sales for the period was mainly from local developments due to the cancellation of Mayfair in August last year. Despite the exclusion of Mayfair, UEM Sunrise managed to rake in RM1.1bil worth of local sales which was positive in light of the current property market sentiment.
“Furthermore, 35% of our total sales was from completed properties, proving that our inventory monetisation efforts have been successful as our inventories reduced by 21% compared to FY2018.
“The biggest interest was in our high-rise residential development Verdi Eco-dominium in Symphony Hills, Cyberjaya which saw a reduction of 51% in its inventories. The Home Ownership Campaign was also beneficial as it contributed 43% to our total sales. This year, we are targeting total sales of RM2bil including the disposal of industrial plots in SILC, ” he said.
As for Kiara Bay, Anwar Syahrin said UEM Sunrise plans to transform the area into an urban integrated livable ecosystem development applying its competencies and experience as master developers for Mont’Kiara and Iskandar Puteri in Kiara Bay.
On new project launches, he said last year it launched RM1.2bil worth of projects, all landed mid-market properties priced from RM500,000 per unit except for high-rise Residensi AVA in Kiara Bay.
“For 2020, we are targeting to launch a total GDV of RM2bil focusing on mid-market landed mainly the Aspira themed products and a new mid-market landed development, Senadi Hills, both in the Southern region, in addition to new phases at Serene Heights Bangi in Central. Sales for these products have always been encouraging, ” he said.
He added UEM Sunrise will also be launching Residensi Allevia in Mont’Kiara and Residensi Equine 9 in Seri Kembangan, including Solaris Parq’s first office block. We take note of the prevailing market conditions, particularly the
business and household sentiment, but he also believes in opportunities of new project launches to ensure the sustainability of our business.
“Divestment of non-strategic lands and assets as well as land portfolio rebalancing, remain one of our key strategies.
"For this year, we have earmarked several assets for divestment purposes estimated between RM400mil to RM500mil including our lands in Kajang and Seputeh as well as pocket lands in Southern and we target to channel the proceeds for new ventures and opportunities, ” he said.
He said also UEM Sunrise took cognisance of the soft property market in the year ahead and will exercise prudence in facing the challenging environment.
It will also continue to consolidate margins through smart spending activities, and to keep ahead of market trends through customer-centric approaches.