UEM Sunrise 1Q revenue at RM196m


UEM Sunrise managing director and CEO Anwar Syahrin Abdul Ajib said: “We continue to explore the acquisition of strategic landbanks both local and overseas for the sustainability of the business and remain steadfast in selling non-strategic lands to raise additional cash."

KUALA LUMPUR: UEM Sunrise Bhd posted revenue of RM196mil in the first quarter ended March 31,2020 compared with RM419mil a year ago as most of its projects last year were launched in the second half.

It said on Friday this led to lower revenue as these ongoing projects are at the early stages of construction progress during the period under review.

“Revenue was also affected by lower sales for the period, mainly attributable to the absence of new project launches in the quarter, ” it said in a statement to Bursa Malaysia.

UEM Sunrise said in terms of revenue breakdown, 78% was contributed by property development, 17% by property investment and the remaining 5% was from others.

It said 42% of the total property development revenue was contributed by the central region mainly from Residensi Solaris Parq in Dutamas, Serene Heights Bangi and Kondominium Kiara Kasih in Mont’Kiara.

It added 31% was from the southern region primarily by Aspira ParkHomes in Gerbang Nusajaya, 68o Avenue opposite the Southern Industrial Logistics Cluster and East Ledang near Educity; all in Iskandar Puteri, Johor.

The balance 27% was from Aurora Melbourne Central and Conservatory in Melbourne, Australia.

Sales for the quarter was RM97mil led by southern developments mainly Aspira ParkHomes, Estuari Gardens in Puteri Harbour and Denai Nusantara near Gerbang Nusajaya representing 48% of the total sales, while 43% was from the central region largely Residensi Solaris Parq, Residensi Astrea in Mont’Kiara and Residensi AVA in Kiara Bay, Kuala Lumpur. The balance 9% was from Conservatory.

UEM Sunrise said at March 31,2020, the company’s unbilled sales stood at RM1.8bil which would be substantially recognised over the next two financial years.

During the first quarter, it recorded a net loss of RM22mil compared with net profit of RM30.10mil a year ago.

The new losses, it said was mainly due to the impact of the foreign exchange losses amounting to RM18mil arising from the weak Australian dollar and South African and.

Commenting on the financial results, its managing director and CEO Anwar Syahrin Abdul Ajib said 90% of the projects launched last year, in terms of GDV, was offered to the market in the second half of 2019.

“The progress completion of the majority of these ongoing projects are still at the early stages of construction with completion at the earliest in May 2021 in the case of Aspira Square whilethe latest tentatively in June 2024 for Residensi AVA.

“This resulted in a shortfall of revenue consequently affecting our earnings. We had planned to launch the latest phase of Serene Heights Bangi and a new residential development in Iskandar Puteri, but the plan did not materialise as Malaysia enforced the Movement Control Order (MCO) on March 18 as ways to curb the spread of Covid-19.

“This resulted in the closure of our offices and retails, delays in our project launches and puts a stop to our construction activities. Economic movements have already slowed down. The weakened Australian dollar against the ringgit towards the end of the quarter, worked against us, ” he said.

Anwar Syahrin said UEM Sunrise's focus is to capitalise on the re-introduction of the Home Ownership Campaign and maximise the incentives given under the campaign.

“Other inducements such as the removal of the Real Property Gains Tax and the uplift of the maximum loan to value ratio of 70% for third properties allow us to access a wider target market. In terms of delivery, we will continue to leverage on digital channels and online platforms in addition to physical project launches. This is key in rebuilding our sales funnel.

“As at to-date, reservations and bookings are close to RM300mil where 58% is from the central region projects mainly Serene Heights Bangi’s latest installment of landed midmarket homes; Frischia, which was opened for registration during the MCO and Verdi Ecodominium in Symphony Hills, Cyberjaya.

“The balance 42% is from the southern region mainly the yet to be launched mid-market landed Senadi Hills followed by Aspira ParkHomes.

“Senadi Hills is a new residential precinct with a total GDV of RM399mil featuring double storey terrace homes near Horizon Hills in Iskandar Puteri. We target to launch both Frischia and Senadi Hills before the end of this month and convert these registrations and bookings into signed agreements soon, ” Anwar Syahrin said.

He also said UEM Sunrise had just acquired another freehold development site at 21-53 Hoddle Street, Collingwood measuring 5,390 square meters in Melbourne.

“This development is expected to give us a GDV of A$250mil. International ventures is part of our strategies and we will continue to look for good development opportunities particularly in Australia”.

Anwar Syahrin also said UEM Sunrise was focused on further strengthening the company’s balance sheet to ride the turbulence so that it could work towards normalising profitability.

“Our cash and bank balance of RM864mil gives us assurance when cash is required whilst our low net and gross gearing of 0.35 times and 0.47 times, respectively provide headroom to raise funds and borrow more, should such opportunities avail.

“Our untapped credit facilities is RM1.9bil as at the end of the quarter including Sukuk of RM1.4bil.

“We continue to explore the acquisition of strategic landbanks both local and overseas for the sustainability of the business and remain steadfast in selling non-strategic lands to raise additional cash.

“We also target to reduce operating expenses through a cost optimisation exercise. On top of that, the incentives under PENJANA coupled with the current low interest rate regime, should augur well for the property market ahead ”.

Anwar Syahrin also said the company's earlier sales and GDV targets of RM2bil each for 2020 are likely to be impacted by the economic uncertainty and is evaluating the targets pending the finalisation of its numbers.

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