UEM Sunrise’s 4Q earnings surge over 6 times

The revenue growth is mainly supported by the strong settlement of Aurora Melbourne Central which accounts for RM1.3b of total revenue


UEM Sunrise Bhd stated that gains from divestments of the St Kilda Road property in Melbourne, Australia, boosted earnings by over six times to RM126.25 million in the fourth quarter ended Dec 31, 2019 (4Q19), from RM19.75 million recorded a year ago for the same period.

Earnings per share for the three months in focus was higher at 2.78 sen against 0.44 sen in 4Q18, the property developer said in a statement yesterday.

Quarterly revenue jumped 54.7% year-on-year (YoY) to RM1.16 billion on the asset divestment and higher settlement of Aurora Melbourne Central.

In December last year, the property developer completed a contract of sale to divest a site and building at St Kilda Road to ACME Co No 4 Pte Ltd for A$107.1 million (RM298.9 million).

Higher contribution from the international segment was supported by further construction progress of domestic projects such as Solaris Parq, Residensi Astrea and Eugenia-Serene Heights in Malaysia’s central region, and Aspira ParkHomes and 68o Avenue in the southern region.

For the financial year ended Dec 31, 2019 (FY19), UEM Sunrise’s net profit declined 20.1% YoY to RM223.8 million despite revenue rising 42.7% YoY to RM2.91 billion. The revenue growth was mainly supported by the strong settlement of Aurora Melbourne Central, which accounted for RM1.3 billion of total revenue, and a settlement rate of 97% to date.

“We still have around A$36 million pending settlement in addition to A$125 million from the en bloc disposal of its serviced residential component to Scape Australia Management Pte 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$42 million for recurring income purposes,” UEM Sunrise MD and CEO Anwar Syahrin Abdul Ajib (picture) said.

Full year sales came in at RM1.13 billion, short of the RM1.2 billion mark as the group’s FY19 target included the sale of Mayfair in Melbourne, which was sold for A$107 million to unlock value and free up cash for other investments and venture projects.

“Despite the exclusion of Mayfair, we managed to rake in RM1.1 billion worth of local sales which we see as positive in light of the current property market sentiment.

“Furthermore, 35% of our total sales were from completed properties, proving that our inventory monetisation efforts have been successful as our inventories reduced by 21% compared to FY18,” Anwar Syahrin said.

The group’s high-rise residential development, Verdi Eco-dominium in Symphony Hills, Cyberjaya, received the most interest, with a 51% reduction in its inventories.

The national Home Ownership Campaign also contributed 43% to the developer’s total sales last year.

For FY20, the group is targeting total sales of RM2 billion, including the disposal of industrial plots in the Southern Industrial Logistics Cluster in Iskandar Puteri, Johor.

It plans to launch projects worth a total gross development value of RM2 billion this year, focusing on mid-market landed homes — mainly, the Aspira-themed products and a new mid-market landed development, Senadi Hills, both of which are located in the southern region.

The group will also roll out new phases at Serene Heights Bangi in the central region, as well as Residensi Allevia in Mont Kiara and Residensi Equine 9 in Seri Kembangan, including Solaris Parq’s first office block.

Divestment of non-strategic lands and assets, and land portfolio rebalancing remain one of the developer’s key strategies moving forward.

“For this year, we have earmarked several assets for divestment purposes estimated between RM400 million to RM500 million, including our lands in Kajang and Seputeh, as well as pocket lands in the southern region and we target to channel the proceeds to new ventures and opportunities,” Anwar Syahrin said.