UEM Sunrise turns cautious on launches

Among the RM250m worth of projects launched to date are Senadi Hills and Aspira Park Homes in the southern region, and Senadi Square

by AFIQ AZIZ / pic by TMR FILE

UEM Sunrise Bhd forecasts fewer new product launches as the property developer posted three consecutive losses in a row on the back of slow demand due to the disruption caused by Covid-19.

In a filing exchange yesterday, the property developer narrowed its net loss to RM28.9 million for third-quarter financial year ended Sept 30, 2020 (3Q20), from RM93.36 million in 2Q20.

Its revenue jumped to RM217.4 million from RM111.96 million posted in the preceding quarter driven by higher construction activities and sales during the Recovery Movement Control Order (RMCO).

“We are cautious in our launches and only bring to market the products that have demand. To date, we have launched RM250 million worth of properties,” the group said.

The group posted a net loss of RM93.36 million in the 2Q20 versus a net profit of RM40.36 million made last year, due to significantly lower revenue, costs of written-down inventories and unfavourable share of results from joint ventures and associates, said UEM Sunrise in a filing to the stock exchange yesterday.

As the construction activities resumed to full capacity after the ease of MCO in May, the group said its sales momentum also picked up in 3Q20.

“The company’s performance in 3Q20 improved significantly compared to the preceding two quarters following the lifting of earlier containment measures,” UEM Sunrise said in a separate statement.

“These improvements, however, could not reverse the effects of the impact brought by the pandemic in the previous quarters,” it added.

Among the RM250 million worth of projects launched are Senadi Hills and Aspira Park Homes in the southern region, and Senadi Square (commercial) project. These three projects amounted to a total GDV of RM166 million.

In the central region, the company has launched Frischia and Verna projects, both in Serene Heights, Bangi, Selangor, totalling a GDV of RM84 million.

“Soon, we will also be launching high-rise Residensi Allevia in Mont Kiara (Kuala Lumpur [KL]) and a new phase in Serene Heights Bangi, totalling RM595 million in GDV,” it said.

Two more phases are also expected at the Senadi Hill, comprising residential and affordable shop offices, with a total GDV of RM100 million.

Aside from the new launches, the company is also expected to reduce its inventories which currently stand at RM498 million.

“The Happy Chase campaign launched on July 25 in conjunction with the 2020 Home Ownership Campaign revived interests and bookings.

“This resulted in a total secured sale plus commitment of approximately RM700 million to date, with Residensi AVA in Kiara Bay having the highest bookings, followed by Estuari Gardens in Puteri Harbour and Serene Heights, Bangi.”

Recently, the group also entered into heads of agreements with subsidiaries of AME Elite Consortium Bhd for the disposal of 72 freehold industrial plots in Iskandar Puteri’s Southern Industrial Logistics Cluster in Johor for RM434 million.

“Progress on the definitive agreements for the project’s Phase 3 is proceeding on schedule. Our wholly owned subsidiary UEM Land Bhd (UEML) also entered into agreements with KLKL Sdn Bhd, a wholly-owned subsidiary of KL Kepong Bhd, for the disposal of UEML’s 20% equity in Aura Muhibah Sdn Bhd to KLKL for RM183 million.

“Full settlement is expected in 1Q21,” the company said.

As such, UEM Sunrise said the unbilled sales at the end of the period is RM1.7 billion and will be recognised over the next 12 to 18 months.

UEM Sunrise shares closed at 40 sen, down two sen, yesterday.