KUALA LUMPUR (May 22): Sunway Bhd says it recorded a 13.8% year-on-year rise in its first quarter net profit to RM136.41 million from RM119.89 million a year ago, on stronger contributions from most business segments, despite a fall in revenue.

Revenue for the three months, which ended March 31, 2019 (1QFY19), retreated 12.3% to RM1.12 billion from RM1.28 billion, as most business segments recorded lower revenue, other than its property investment and healthcare segments, the group noted in a statement.

Segmentally, its property development's profit before tax (PBT) rose 19.6% to RM32.8 million in 1QFY19 from RM27.5 million a year ago, primarily due to the reversal of provisions made previously which are now not required, while its property investment's PBT climbed 0.5% to RM57.4 million from RM57.1 million, due to higher contribution from Sunway Geo in Sunway South Quay, as well as improved contribution from the group’s theme parks.

Its construction segment's PBT also rose 5.4% to RM43.7 million from RM41.4 million, boosted by lower intra-group profit eliminations in the current quarter, while its healthcare segment's PBT climbed 43.4% to RM15.4 million from RM10.8 million, mainly on higher occupancy from increased number of new beds and higher outpatient treatments.

Its other segments' PBT, meanwhile, improved 197% to RM19.6 million from RM6.6 million, on higher net interest income contribution from the group’s treasury functions.

However, its trading and manufacturing segment's PBT halved to RM6.6 million from RM12.8 million due to lower sales from subdued market demands, both locally and overseas, and lower operating margins. Its quarry segment also saw PBT falling to RM1.7 million from RM3 million due to lower average selling prices for aggregates and lower premix sales volume.

"It should be noted that [group] PATMI (profit after tax and minority interests) would have been higher by 46.7% compared to the corresponding quarter of the previous financial year if not for the adoption of MFRS 15 on one of the group's Singapore and China property development projects, for which the group can only recognise the development profits upon completion.

"The progressive profits from these projects, which amounted to RM39.5 million for the current quarter, have to deferred accordingly," the group said in the statement.

The group's property development division managing director, Sarena Cheah, said the group plans to launch RM2 billion worth of projects for FY19. "We are confident that the launches would continue to do well as more than 70% of the new launches are either in integrated developments or townships," she added.

The group also expects its healthcare segment to be a growth area for the group, with more medical centres in the pipeline in strategic locations like Kuala Lumpur, Penang, Perak and Iskandar Johor. "Sunway Medical Centre Velocity in Kuala Lumpur is targeted to open this August," it said.

Sunway's chief financial officer Chong Chang Choong, said the group will continue to adopt a prudent approach in executing its business strategies, adding the group is well positioned to meet the challenges and capitalise on any opportunities which may arise going forward, due to its diversified yet synergistic businesses.

Sunway shares closed unchanged at RM1.69 yesterday, giving it a market capitalisation of RM8.26 billion. In the past one year, the stock has climbed 17.02%.

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