Its revenue is lower for the quarter as major developments were completed last year

by MARK RAO / pic by HUSSEIN SHAHARUDDIN

UEM Sunrise Bhd has reported higher earnings for its first quarter ended March 31 this year (1Q18), as lower operating costs and higher net contribution from associates and joint ventures cushioned the fall in the company’s revenue.

For the quarter, the property developer saw its net profit increasing by 8.5% year-on-year (YoY) to RM25.29 million, despite its turnover declining 31.5% YoY to RM287.74 million in the same period.

In an exchange filing yesterday, Khazanah Nasional Bhd’s unit said revenue was lower for the quarter as major developments, including Teega in Puteri Harbour and the Mont Kiara-based Residensi22 and Arcoris, were completed last year.

The recently launched Residensi Solaris Parq in Dutamas, Kondominium Kiara Kasih in Segambut and Serimbun in Iskandar Puteri remain in the initial development stage and have yet to contribute significantly to group income.

The revenue decline was offset by the company’s property development sales in 1Q18 which jumped 156% YoY to RM434.3 million.

The bulk of the sales, or 39%, was contributed by projects in the central region including Residensi Solaris Parq, Kondominium Kiara Kasih and Symphony Hills in Cyberjaya.

The other 24% of property sales came from its property developments in the Iskandar Puteri region, while the remaining 37% was from the Melbourne-based projects, Mayfair and Conservatory.

In line with the Malaysian Financial Reporting Standards 9 which came into effect at the start of 2018, UEM Sunrise said it is no longer recognising revenue from its international projects based on progress completion, but on completion and settlement.

To date, the property developer launched projects worth a total gross development value (GDV) of RM356.8 million, while unbilled sales stood at RM4.8 billion in 1Q18.

Its MD and CEO Anwar Syahrin Abdul Ajib (picture) said the company’s performance is highly positive amid the current soft property market environment.

“Interest on our completed properties such as Symphony Hills, alongside Nusa Bayu and East Ledang in Iskandar Puteri, has also intensified following our sales campaign which started in February this year,” he said in a statement yesterday.

He said the campaign, which comprises various value propositions to buyers, is not only for completed properties, but selected ongoing projects as well.

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

Worth a total GDV of RM217.5 million and RM139.3 million respectively, Kondominium Kiara Kasih and Serimbun have collectively achieved RM184 million in total sales since their respective launches earlier this year.

The take-up rate for Serimbun is at 73%, while Kondominium Kiara Kasih is at 39%.

“We are aware of the market’s needs for more mid-market and affordable residential products within strategic locations, and have devised our deliverables to meet such expectations.

“This proved to be effective as seen in the sales performance of Serimbun and Kondominium Kiara Kasih,” Anwar Syahrin said.

He noted that the company’s focus is wide-ranging and includes townships, high-rise residences and mixed commercial developments, which range from affordable, to midand high-end market segments.

UEM Sunrise also recently completed the RM416.4 million acquisition of 72.7 acres (29.4ha) of land in Kepong from Kuala Lumpur City Hall, which will see the property developer and Mega Legacy Equity Sdn Bhd jointly developing a RM15 billion GDV project over a 15-year period.

The property developer has set a sales and GDV target of RM1.2 billion respectively for 2018 and will launch new projects depending on market conditions to meet them.