UEM Sunrise exceeds launch and sales targets for 2023

• Total revenue of RM605 million; 76% from property development activities.
• Operating expenses dropped by 11% in contrast to the first half of 2022.
• Profit after tax and non-controlling interests improved to RM40 million.
• Earnings visibility backed by RM2.7 billion unbilled sales.

KUALA LUMPUR (Aug 18): UEM Sunrise Bhd announced in its financial results for the first half ended June 30, 2023 (1H2023) today, which recorded a revenue of RM605 million. This was driven by higher construction progress from local developments, mainly Residensi AVA in Kiara Bay, Residensi Allevia in Mont’Kiara, Serene Heights in Semenyih, Residensi Astrea in Mont’Kiara and KAIA Heights in Equine Park, Seri Kembangan.

“This is in addition to the revenue secured from land sales, which contributed 14% towards the total revenue and revenue from property investments, facilities management, and others,” stated UEM Sunrise in a media release.

The company’s gross profit margin improved to 37% in 1H2023 in comparison to 27% in the 1H2022, mainly due to the recognition of project cost savings in 1Q2023. Its operating expenses have dipped by 11% compared to 1H 2022, while its operating profit improved by 17%.

In tandem with the higher gross profit, after including the positive performance of its joint ventures and associates, the company recorded a profit after tax and non-controlling interests of RM40 million for 1H2023.

The company’s inventories were further reduced by 28% to RM146 million as of June 30, 2023 (RM203 million as of Dec 31, 2022), while its cash balances remained strong at RM1.5 billion, a 50% increase from its position of RM1.0 billion as of Dec 31, 2022. Net gearing remained moderate at 0.46x as of 30 June 2023.

Property sales 1H2023 were RM1.5 billion; 32% from Central, mainly from The MINH in Mont’Kiara, The Connaught One in Cheras, and Residensi Allevia, while 9% was from Southern, mostly from Senadi Hills, Estuari Gardens and Aspira Square, all in Iskandar Puteri.

UEM Sunrise is one of EdgeProp START’s strategic partners. The MINH in Mont’Kiara is a development highlighted in this partnership. Check out the details here.  

International projects contributed a significant portion towards secured sales this period, with the sale of the Collingwood development in Melbourne, Australia, to Greystar Real Estate Partners amounting to A$277.3 million (RM873.7 million). As of June 30, 2023, UEM Sunrise has unbilled sales of RM2.7 billion.

The company aims to remain financially sound given its gross and net gearing of 0.68x and 0.46x, respectively, and cash balances of RM1.5 billion as of June 30, 2023. Unbilled sales of RM2.7 billion as of 30 June 2023 will be substantially recognised over the next 18 to 48 months.

Meanwhile, UEM Sunrise is progressing into the second stage of Triage this year after achieving the majority of the initiatives rolled out last year. Triage is the first part of the company’s three-phase strategic turnaround plan and takes place from 2022 to 2023. This will be followed by Stabilise (2024 to 2025) and Sustain (2026 and beyond).

UEM Sunrise will continue to launch new phases of existing developments, mainly double-storey landed homes in Serene Heights, Semenyih as well as further phases in Senadi Hills and Gerbang Nusajaya, both in Iskandar Puteri.

Positive movements, strengthening presence in Australia

Apart from its steady sales and string of launches in 1H2023, UEM Sunrise has also shown positive, notable movements, with the introduction of new faces in its boardroom and management and active expansion plans in Australia, amid signs of “improvement in the macroeconomic climate”.

In June, UEM Sunrise partnered up with global leader in the investment, development and management of rental housing, Greystar Real Estate Partners, LLC, to develop the first ‘Build-to-Rent’ (BTR) project in the inner-Melbourne suburb of Collingwood with a value transaction of approximately A$277.3 million. This is the first BTR project carried out by a Malaysian developer in a bid to strengthen the group’s presence there.

The development is expected to include approximately 400 apartment units across two buildings, with a mix of studios and one-, two- and three-bedroom apartments suitable for multi-generational living.

The company acquired its first residential development site in Subiaco East in Perth, Western Australia on Aug 15, 2023, for A$22.185 million and will deliver two landmark apartment buildings.

UEM Sunrise has purchased Lots 1 and 2 of The Oval precincts at Subiaco East from DevelopmentWA as part of the state’s most significant urban redevelopment project at the iconic former Subiaco Oval.

The upcoming mixed-use residential precinct will comprise the delivery of sleek dual towers with approximately 430 apartments across Lots 1 and 2, subject to development approval, with further details to be firmed up. The project will include up to 12% affordable housing as well.

Construction is expected to commence in 2026. The acquisition in Perth signifies UEM Sunrise’s plans to expand its presence in Australia.

Comments from the CEO

“We are on track as far as our pipeline of new launches worth RM2.5 billion to the market. Our sales as of June 30, 2023, have amounted to RM1.5 billion, with 32% derived from Central comprising The MINH in Mont’Kiara, The Connaught One in Cheras, and Residensi Allevia, while 9% was from Southern, mainly Senadi Hills, Estuari Gardens and Aspira Square, all in Iskandar Puteri.

“Our international projects have contributed a significant portion towards secured sales this review period, with the sale of our Collingwood development in Melbourne, Australia, to Greystar Real Estate Partners amounting to A$277.3 million. We remain confident that we will be able to maintain a positive earnings position for the quarter under review whilst strengthening the fundamentals and our stakeholders’ confidence in the company,” said UEM Sunrise chief executive officer Sufian Abdullah.

“The launches of our latest development in Mont’Kiara, The MINH in May and our first transit-oriented development in June to the public were met with very warm receptions. With a GDV of RM979 million and RM743 million, respectively, The MINH and The Connaught One contribute to our 2023 goal of achieving RM 2.5 billion in GDV launches. Both developments are also the first of their kind in our Happy+ product series, with The MINH under the CLUB Edition while The Connaught One under the RISE Series,” added Sufian.

“We are also targeting to launch our latest development in Kiara Bay in Kepong, allowing those who missed out on Residensi AVA to own a residence near the majestic Kepong Metropolitan Park. Named Residensi ZIG, this upcoming development is slated as our third Happy+ product this year and has a biophilic design concept. The three-tower development will feature 1,126 residential units with sizes ranging between 450 sq ft  to 1,508 sq ft. With an estimated GDV of RM646 million, this will be our second RISE series product this year after The Connaught One,” he said.

“In the Southern region, we announced early this month that Phase 2A of our freehold neighbourhood of Senadi Hills has registered strong demand among the public, with its 44 non-Bumiputera units all fully sold shortly after its launch on June 18, and its Bumiputera lots all fully registered, further reiterating the public’s continuing confidence in the company.”

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