However, net profit was lower at RM154.4 million compared to a net profit of RM237.9 million in the same quarter of last year mainly due to share of lower fair value gains from the annual revaluation exercise done on Sunway REIT properties. Save for the fair value gains which were lower by approximately RM87.1 million, the Group’s overall operational performance was comparable to the corresponding quarter of the previous financial year, despite a reduction in contribution from the construction division to 54.4% following the listing of Sunway Construction Group Berhad in July 2015.
“We expect to achieve a satisfactory performance for the second half of the financial year, underpinned by the resilient and diversified businesses of the Group, although the market outlook remains uncertain. This is further supported by Sunway’s strong balance sheet and low gearing,” said Chong Chang Choong, CFO of Sunway Berhad. The Board is pleased to declare an interim dividend of 5 sen per share which is similar to the interim dividend declared last year.
The property development segment reported revenue of RM315.1 million and profit before tax of RM60.6 million in the current quarter largely in line with the revenue of RM324.2 million and profit before tax of RM53.1 million reported in the corresponding quarter of the previous financial year. Although the revenue was lower, the performance of the property development segment in the current quarter was higher mainly due to higher profit recognition from local projects including Sunway Velocity and Sunway Geo Residences.
Property sales year to date, is at RM613 million as compared to last year at RM478 million. Unbilled sales for the property development division remain healthy at RM2.0 billion, providing good profit visibility for the property division.
The property investment segment reported revenue of RM160.1 million and profit before tax of RM41.3 million in the current quarter compared to revenue of RM144.8 million and profit before tax of RM132.9 million in the corresponding quarter of the previous financial year. The increase in revenue was mainly contributed by higher rental contribution and better occupancy recorded from the portfolio of investment properties.
HIGHER REVENUE FROM CONSTRUCTION SEGMENT
The construction segment recorded revenue of RM249.3 million and profit before tax of RM34.5 million in the current quarter compared to revenue of RM244.1 million and profit before tax of RM56.3 million in the corresponding quarter of the previous financial year. Although revenue was marginally higher in the current quarter, profit before tax was lower mainly due to the completion of several substantial infrastructure projects in the corresponding quarter such as the BRT-Sunway Line and the completion of LRT Package B (Kelana Jaya Line Extension) and Klang Valley MRT Package V4, Section 17 to Semantan Portal in the fourth quarter of 2015. The Klang Valley MRT Package V201, which will commence work in the second half of the financial year, also contributed to the lower earnings due to the upfront planning and preliminary costs incurred.
Nevertheless, the construction outstanding order book remains healthy at RM4.9 billion with a year-to-date order book replenishment of RM2.4 billion, close to the management’s FY16 target of RM2.5 billion. This was boosted by a recent award of RM268 million by The Society for International School of Kuala Lumpur (ISKL) to build an international school in Ampang. In addition, the construction segment is well positioned to compete for more infrastructure projects expected to be rolled-out by the Government.