UEM Sunrise 2Q loss narrows amid improved sales and higher construction progress

KUALA LUMPUR (Aug 26): UEM Sunrise Bhd posted a net loss of RM7.37 million for the second quarter ended June 30, 2021 (2QFY21), the property developer’s sixth consecutive quarter in the red.

The latest quarterly loss is however significantly smaller than the RM94.66 million reported for 2QFY20, thanks to a 122.53% jump in revenue to RM249.14 million from RM111.96 million.

The higher revenue was due to improved sales and higher construction progress of local property developments in the current quarter, the group said in a filing yesterday with Bursa Malaysia.

UEM Sunrise said the latest quarterly loss was incurred due to higher finance cost, as a result of higher monthly average borrowings balance of RM4.4 billion, as compared with RM3.8 billion in 2QFY20.

“The loss after tax was further exacerbated by unfavourable share of results from joint ventures and associates, although mitigated by the higher deferred tax assets recognised,” it added.

On a quarter-on-quarter basis, however, the 2QFY21 net loss was wider than the RM4.32 million in the preceding quarter, while revenue eased 1.41% from RM252.69 million.

For the first half, UEM Sunrise posted a much smaller net loss of RM11.69 million, compared with a net loss of RM116.82 million in the previous January-June period.

Six-month revenue increased 63.03% to RM501.84 billion, from RM307.81 billion previously.

The group said the improved half-year revenue was driven by higher construction progress and billings from Residensi Solaris Parq in Dutamas, Aspira ParkHomes in Gerbang Nusajaya, and Serene Heights Bangi, as well as higher sales of Estuari Gardens in Puteri Harbour.

Property sales improved substantially to RM707 million in the first half compared to RM151 million in the same period last year, following the spillover of the positive momentum in the second half of 2020.

To-date, the group’s total gross development value of launched properties is RM300 million, all in the central region.

The group has an unbilled sales of RM2 billion as of June 30.

In a statement, UEM Sunrise CEO Sufian Abdullah warned that the current situation does not permit the group to recover immediately, as it requires the ideal product pipeline to ensure sustainability and profitability.

“We are currently building a position that will allow us to become more effective when we release our products to the market. Once we have stabilised the pipeline and commence deployment on the lands we acquired, we will rebound,” he said.

Sufian said the expected reopening of the economy and relaxation of containment measures towards the fourth quarter of the year is an opportunity for the group to catch up on its operations and construction plans.

“With plans to launch a number of projects in the second half of the year, especially our new development in Taman Pertama, Cheras in the fourth quarter, we look forward to mending our performance towards the end of the year. In the interim, we cautiously maintain our sales target of RM1.2 billion,” he added.

UEM Sunrise's share price closed 0.5 sen or 1.33% lower at 37 sen yesterday, valuing the group at RM1.87 billion.

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