UEM Sunrise not ruling out MSS, says CEO

By SHAZNI ONG / Pic By HUSSEIN SHAHARUDDIN

UEM SUNRISE Bhd has not ruled out the possibility of cutting down its workforce via a mutual separation scheme (MSS) in the near future, as it looks to balance and mitigate its operating expenditure due to slower market conditions.

UEM Sunrise MD and CEO Anwar Syahrin Abdul Ajib (picture) said as a corporate commercial organisation, it is normal for a company to actually look at its costs all the time and to find ways to create shareholder value to cost savings.

“The things that we look at will include our construction cost, overheads, sales and marketing costs and so forth. This is just one of the components of costs that we look at within the organisation.

“We will have to table it (findings) to the board. If a decision is made at that point of time, then a proper announcement will be made accordingly,” he told reporters at the company’s second- quarter (2Q) financial performance media briefing in Kuala Lumpur yesterday.

Anwar Syahrin also said the company has to think of what is required within the organisation in order to move forward.

“It is not just about headcounts…it is about looking at what we call a new operating model for this organisation and how do we remain competitive in line with the many things that are happening within the business environment.

“What is required within the organisation is a new mindset, skill set and better achievability of running a business. It does not necessarily mean cutting headcount. What is the point (of doing that) if the mindset of the people within the organisation is still stuck in the old ways?” he asked.

Prior to this, it was reported that UEM Sunrise could cut up to 10% of its workforce early next year in a move to trim cost and operating expenses as a result of weak market conditions.

UEM Sunrise, which is 66.06% indirectly-owned by Khazanah Nasional Bhd, employs about 1,500 people.

Meanwhile, Anwar Syahrin said the company is optimistic to achieve the set target of RM1.2 billion sales for this year.

“We have done RM532 million so far. A lot of it is based on the new launches that we have and also the inventory monetisation that is taking place. It is tough, but we feel that it is still achievable for us,” he added.

Moving forward, Anwar Syahrin revealed that the company is eyeing to launch 15 projects next year with a target of RM2 billion in gross development value (GDV).

He said the bulk of the launches — comprising landed and high rise developments — would take place in the second half of the year.

Anwar Syahrin also noted that UEM Sunrise is planning to develop a RM300 million GDV project in South Africa via a local partnership.

The property developer posted a lower net profit in the 2Q ended June 30, 2019, a decline of 81.12% to RM40.36 million year-on-year (YoY) compared to RM213.79 million in the same quarter last year.

The fall in net profit was largely due to contribution from land sales in the preceding year’s corresponding period which carry a significantly higher margin cushioned by the partial settlement income of the Aurora Melbourne Central and Conservatory projects.

Earnings per share dropped 80.4% to 0.89 sen versus 4.54 sen in the same quarter a year earlier, the group said in a Bursa Malaysia filing.

Revenue for the quarter, however, rose 74.51% to RM1 billion YoY compared to RM573.35 million in the same quarter a year ago, attributed to the partial settlement of the Aurora Melbourne Central and Conservatory projects.

For the cumulative six months, UEM Sunrise posted a fall in net profit of 70.53% to RM70.46 million versus RM239.08 million in the corresponding period last year.

However, its revenue for the six months increased 64.89% to RM1.42 billion, compared to RM861.09 million in the same period a year ago.

UEM Sunrise closed 1.49% or one sen lower to 66 sen, with a market value of RM2.99 billion.