UEM Sunrise sees 26% drop in 4Q net profit

KUALA LUMPUR (Feb 28): UEM Sunrise Bhd’s net profit in the fourth quarter ended Dec 31, 2016 (4QFY2016) slipped 26.4% to RM53.3 million from RM72.4 million a year ago, although its revenue climbed 2.9% to RM624.7 million from RM607 million previously.

The group said its increase in quarterly revenue was due mainly to revenue contribution derived from the progress made by Residensi 22 in Mont'Kiara, Serene Heights in Bangi and Teega Puteri Harbour in Nusajaya.

According to the group’s income statement, its expenses for the quarter jumped by 51.8% to RM131 million from RM86.3 million in 4QFY2015.

According to its filing with Bursa Malaysia, the group’s annual net profit slid 42.7% to RM147.4 million for the financial year ended Dec 31, 2016 (FY2016) from RM257.2 million mainly due to weaker performance of joint ventures and associates and the absence of several one-off items which were recorded in FY2015.

Revenue stood at RM1.84 billion, 5% higher than the RM1.75 billion seen last year.

“The Board of Directors is not proposing any final dividend for the current financial year as the company intends to conserve its cash balances to enable it to take advantage of landbanking opportunities in the near-term for future growth,” it said in a separate statement released today.

The developer added that total property development sales for the period under review was RM1.36 billion, 37% higher than the its sales target of RM1 billion, driven by projects in the Southern Region which contributed RM686.8 million or 50% of total sales compared with 12% in 2015.

It also revealed that property sales for both Malaysia’s central region and international business accounted for 25% each of total sales for the period.

“Serene Heights Bangi, a mid-market residential township development in Selangor was the main contributor for the Central region. Conservatory, an exclusive high-rise residential development overlooking Carlton Gardens and Melbourne’s Royal Exhibition Centre in Australia was the main contributor to International sales,” it added.

“Despite the tough current market environment influenced by a generally soft economy, weak consumers’ sentiment and tighter credit access, we noticed that affordable and landed mid-market type of residential developments are still the preferred choices of local buyers. Tapping on our vast landbank in both the Southern and Central Regions, we realised the opportunity and launched a series of affordable and mid-market products in both — Southern and Central Regions in 2016 and we are encouraged by our sales performance,” said the group’s managing director, Anwar Syahrin Abdul Ajib.

On prospects, the group said it will remain cautious and it is targeting to launch new projects with a combined gross development value (GDV) of RM1.7 billion and a total property sales target of RM1.2 billion.

“2017 is expected to be another challenging year for the local property sector. Headwinds include weak consumer sentiment, rising cost of living, low income growth, high household debt and a relatively high loan rejection rate by banks,” it said.

“Overall, the group is confident that it will be able to deliver satisfactory performance in 2017 on the back of the existing unrecognised revenue of RM4.1 billion from on-going projects that will continue to contribute towards the Group’s revenue and earnings,” it added.

UEM’s shares closed yesterday one sen higher at RM1.15 for a market capitalisation of RM5.22 billion. — theedgemarkets.com

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