UEM Sunrise chief executive officer Sufian Abdullah
PETALING JAYA: The reduction in residential overhang is attributed to heightened buying interest which will likely improve new property sales prospects for developers, according to UEM Sunrise Bhd
.
For the remainder of the year, the company said it is staying focused on its 2024 priorities in core activities, property investment and exploring growth opportunities.
UEM Sunrise’s net profit decrease by 23.7% year-on-year (y-o-y) for the second quarter ended June 30, 2024 (2Q24) to RM18.8mil, as revenue dropped 43.6% to RM205.2mil.
The group attributed the lower revenue to sales of non-strategic land in Tapah, Perak and Iskandar Puteri, Johor which had significantly contributed to revenue in the prior year’s corresponding quarter (2Q23).
“Additionally, 2Q23 also benefited from higher property development revenue from advanced local projects including Residensi AVA in Kiara Bay, Residensi Astrea in Mont’Kiara, and Serene Heights in Semenyih,” it said in a filing with Bursa Malaysia.
It reported that higher operating expenses, exacerbated by unfavourable results from joint ventures and associates, had contributed to the lower earnings.
For the first half to June 30, 2024 (1H24), UEM Sunrise charted net earnings of RM27mil, representing a 32.5% y-o-y decline compared with the first half of 2023, as turnover reduced by 28.9% to RM430.2mil.
The lower revenue was due to decreased contributions from local property development projects, said the group.
Reduced cost savings and higher operating expenses, resulting from increased headcount as well as elevated selling and distribution expenses to boost sales for ongoing projects, also put a squeeze on profits.
From a quarterly perspective, while revenue dipped 8.8% from RM225mil compared with the three months ended March 31, net profit more than doubled from RM8.2mil.
Lower land sales for the reduced quarter-on-quarter turnover, realisation of cost savings from completed development projects, coupled with a progressive revenue trend, a dedication to inventory clearance and reducing debt, had contributed to the surge in net profit.
In view of this, the company reiterated its commitment in delivering a disciplined launch schedule, recently introducing the Senadi Hills Rumah Mampu Biaya Johor-C Development and Aspira LakeHomes phases four and six, with a gross development value of RM20mil and RM108mil, respectively.
UEM Sunrise revealed its robust short-term liquidity position, with RM1.2bil in cash and bank balances, as net gearing ratio also reduced to 0.43 times, which it said underlined a healthy financial headroom for investment and growth.
Additionally, with an unbilled sales of RM2.7bil, it is confident of an assured and steady revenue stream and cash flow visibility for the foreseeable future.
Chief executive Sufian Abdullah said its first-half financial results highlighted its commitment to delivering sustained revenue and profitability momentum, even in a challenging and dynamic market.
“We are confident in our ability to continue delivering value to our stakeholders while reinforcing our position as a market leader in the sector,” he said.
