UEM Sunrise FY14 profit falls 17% to RM479.9 mil on lower margin land sales

KUALA LUMPUR (Feb 26): UEM Sunrise Bhd’s net profit more than tripled to RM272.38 million in the fourth quarter ended Dec 31, 2014, from RM77.96 million a year earlier, bringing its basic earnings per share (EPS) to 6 sen from 1.79 sen.

Revenue for the quarter soared 134% to RM1.34 billion, from RM573.11 million in the year before.

The group has proposed a first and final single tier dividend of 3 sen per share for the year.

UEM Sunrise (fundamental: 1.35; valuation: 1.2) said the higher revenue for the quarter was “primarily due to Gerbang land sales to FASTrack Iskandar Sdn Bhd of RM248.3 million, and Scope Energy Sdn Bhd of RM522.7 million”.

However, for the full year of 2014, net profit came in 17% lower at RM479.93 million, compared to RM579.14 million in FY13, despite a 10% year-on-year (y-o-y) increase in revenue to RM2.66 billion, from RM2.43 billion.

The lower profit was attributed to lower margin from land sales, which was partly offset by higher profit from property development.

“The lower margins for the strategic land sales in FY14 are due to the catalytic nature of the two projects, which will help kick start the development of Gerbang Nusajaya,” said the group.

Going forward, UEM Sunrise expects a challenging 2015, amid concerns on oversupply of properties, a tight lending environment and the general economic uncertainties.

“However, the group will be able to sustain its performance in 2015, on the back of the existing unrecognised revenue of RM3.9 billion (as at Dec 31, 2014) from on-going projects that will continue to contribute towards the group’s revenue and earnings,” it said.

According to UEM Sunrise, it will also be launching several new projects, including Estuari, Denai Nusantara and Gerbang Nusantara in the southern region, and Serene Heights, Artisan Hills and Sefina in the central region.

The group will also be launching Conservatory, its second Australian project, in the second half of 2015.

“With all these plans in place, the group has set a sales target of RM2 billion for 2015,” it said.

UEM Sunrise closed unchanged at RM1.38 today, with a market capitalisation of RM6.26 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

Looking for properties to buy or rent? With >150,000 exclusive listings, including undervalued properties, from vetted Pro Agents, you can now easily find the right property on Malaysia's leading property portal EdgeProp! You can also get free past transacted data and use our proprietary Edge Reference Price tool, to make an informed purchase.