Sunway 1Q net profit up 5.7% on better performance in most segments

KUALA LUMPUR (May 30): Sunway Bhd’s net profit rose 5.7% to RM107.91 million or 5.33 sen a share in the first quarter ended March 31, 2017 (1QFY17), from RM102.1 million or 5.71 sen a share a year ago, on higher contribution from all business segments except property development.

Quarterly revenue also increased 2.1% to RM1.09 billion in 1QFY17 from RM1.07 billion in 1QFY16.

In a filing with Bursa Malaysia yesterday, Sunway said the property development segment reported a 38.8% decline in revenue to RM143.3 million in 1QFY17, from RM234.1 million in 1QFY16, mainly due to lower sales and progress billings from local development projects.

“In addition, no sales were recorded for the group’s wholly-owned Avant Parc project in Singapore in the current quarter under review as the project was fully sold in the second quarter of 2016. As a result, pre-tax profit was correspondingly lower,” it added.

Its construction segment, meanwhile, recorded a higher revenue of RM316.8 million in 1QFY17 from RM311.4 million a year ago. Year to date, the group’s construction outstanding order book stood at RM4.6 billion and property unbilled sales at RM1.4 billion.

On prospects, Sunway said it is expected to deliver a satisfactory performance in the next quarter.

“While the overall property market remains relatively slow, the steady performance of the other segments and recurring income from the property investment segment provide good earnings visibility for the group,” said Sunway chief financial officer Chong Chang Choong in a separate statement.

“The robust growth rate of the Malaysian economy in the first quarter of 2017, coupled with the improving global economic forecast by the International Monetary Fund, augurs well for the group, which is well positioned to benefit from any better-than-expected growth of the domestic economy,” he added.

This article first appeared in The Edge Financial Daily, on May 30, 2017.

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