Sunway Bhd reports lower net profit for 1Q21

by LYDIA NATHAN

Sunway Bhd (Sunway) has registered a lower profit of RM58.4 million for the first quarter ended March 31, 2021, compared to RM62.4 million in the corresponding quarter of the previous financial year due to lower contributions from property development and property investment segments.

Revenue for the quarter increased 4.7% to RM1 bil due to higher contributions from most business segments except property development and property investment segments

“Most of the business segments are gradually recovering from the fallout of the pandemic. However, the hospitality and leisure businesses under the Property Investment segment continued to be impacted in the current quarter due to the resurgence of Covid-19 cases and the reinstatement of the Movement Control Order (MCO 2.0) from January 13, 2021 to March 4, 2021, which called for the closure of the theme park operations, more stringent social distancing requirements and restriction in interstate travels,” the company said.

The property development segment reported revenue of RM97.2 million compared

to revenue of RM139.2 million and profit before tax of RM32.8 million in the corresponding quarter of the previous financial year, representing a decrease in revenue of 30.2% and profit before tax of 37.0%. The financial performance for the current quarter was lower due to higher profit recognition in the corresponding quarter of the previous financial year from the completion and handover of a local development project.

The property investment segment posted revenue of RM58.7 million due to lower rental income after the disposal of The Pinnacle Sunway to Sunway REIT, which was completed on November 20, 2020.

Its trading and manufacturing segment increased to RM224.5 million from RM194.2 million due to higher sales from the local and overseas markets and better-operating margins, while its healthcare segment recorded RM170.6 million in revenue due to a strong recovery in hospital activities at Sunway Medical Centre and Sunway Medical Centre Velocity after the MCO2.0 was lifted in early March.

“The construction segment posted revenue of RM321.4 million for the current quarter on the back of higher progress billings from local construction projects and lower intra-group eliminations. However, the property development segment posted a lower revenue of RM97.2 million due to higher profit recognition in the corresponding quarter of the previous financial year from the completion and handover of the local development project,” Sunway said.

Meanwhile, the group said despite the country’s gross domestic product (GDP) contracting by 0.5% for the first quarter of 2021, this may be short-lived as the recent resurgence of cases has resulted in MCO 3.0.

“While the group’s leisure and hospitality businesses continue to be impacted by the ongoing pandemic, the other business segments of the group are, however, more resilient and able to continue to perform and deliver satisfactory results. The group is hopeful that the pandemic can be brought under control with the progressive rollout of the mass vaccination programme by the government in the short to medium-term,” it said.