UEM Sunrise 2Q net profit up 73% on higher property development revenue

KUALA LUMPUR (Aug 23): UEM Sunrise Bhd's net profit for the second quarter ended June 30, 2017 increased 73% to RM94.55 million from RM54.66 million a year earlier on the back of a jump in its revenue.

Revenue rose 67% to RM897.8 million from RM537.81 million in the previous corresponding period, thanks to increased property development revenue from the progress made by the group's Residensi 22 project in Mont'Kiara, Teega in Puteri Harbour and Aurora Melbourne Central in Australia.

The group also attributed its improved revenue to the sale of Alderbridge lands in Richmond, Canada, amounting to C$113 million (RM371 million), which was disposed of to South Street Development Group.

The sale, the group said, was in line with its decision not to pursue the development of the Richmond lands, and consolidate efforts and focus on developments in Malaysia and Australia, UEM Sunrise said in a statement today.

Cumulative net profit for the first six months of the year climbed 170% to RM155.82 million, from RM57.68 million in the first half of the previous year. The group attributed this to higher revenue and gains from completed projects' revised cost estimates recognised in the immediate preceding quarter and share of lower profit from joint ventures and associates.

Half-year revenue stood at RM1.44 billion, 81% higher than the RM795.56 million reported previously.

UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib said the first-half revenue was the group's best since its listing in 2008.

"Notwithstanding the disposal of our Alderbridge lands in Richmond, Canada, contribution from property development revenue has also improved in view of strong construction progress achieved during the period. We are extremely pleased with these results," he said in a statement.

Property development activities contributed 67% of total revenue during the period, the group said.

Property development sales for the period was RM391.7 million, 46% of which was contributed by the southern region of peninsular Malaysia followed by 32% from the central region, while the remaining 22% was from international projects.

"Sales from projects in the southern region continue to contribute positively, continuing the trend that started in the fourth quarter of 2016. With the right location and product mix, we believe that the market is more receptive on landed mid-market residences," said Anwar Syahrin.

UEM Sunrise expects to continue the positive momentum for the rest of the 2017 with the expected completion of several land sale transactions in the remaining months.

UEM Sunrise share rose eight sen or 7.14% to RM1.20 as at 3.47pm, for a market capitalisation of RM5.22 billion. — theedgemarkets.com

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