UOA Dev earnings down on absence of FV gain

KUALA LUMPUR (May 30): UOA Development Bhd's net profit for 1Q ended March 31, plunged to RM47.6 million from RM133.6 million a year ago due to the absence of fair value (FV) gain on investment properties in the quarter under review.

Revenue was marginally higher at RM148.07 million from RM145.73 million a year ago.

Earnings per share stood at three sen versus 15 sen a year ago while net asset per share was RM1.54 compared with RM1.56.

UOA Development remains upbeat on growth prospects for financial year 2012.

"There were some purchasers that had difficulties with their bank financing. But other than that, the demand for our development has still been sustainable.

"We have a couple of launches coming up. So, of course, there is room for us to improve on the sales revenue," chief operating officer (development) David Khor told the media after the company's AGM on Tuesday.

UOA Development's pipeline of launches for FY12, mainly comprising residential properties, are worth an estimated RM1.5 billion in gross development value (GDV).

The company has no plans to deviate from its focus on the Greater KL region.

Khor said the Economic Transformation Programme and other government initiative projects lined up for the Greater KL region, will boost the demand for property within the area.

"Looking at the size of Greater KL region, it's much bigger than Singapore. So there's still plenty of opportunity. It's just a matter of price., he added.  

Executive director Alan Charles Winduss said the group has yet to see any impact from the economic slowdown.

However, he did not discount the fact that should the banks resort to further tightening of loans for end consumers, it may become a challenge for the company in the future.     

"We are balanced between commercial and residential properties, so we have hedged our bets.

"With our business plan, if we find that the commercial [property sector] is slowing down, we've got enough to move into residential properties to maintain the same momentum," Winduss said.

The counter closed two sen higher at RM1.57 on Tuesday with 942,300 shares done.

This story appeared in The Edge Financial Daily on May 30, 2012.