KUALA LUMPUR, 27 February 2017 – UEM Sunrise Berhad (“UEM Sunrise” or the “Company”) today announced its financial results for the financial year ended 31 December 2016 (“FY2016”) where total revenue achieved for the period stood at RM1,841.5 million compared to RM1,749.9 million recorded for the financial year ended 31 December 2015 (“FY2015”), an increase of approximately 5%. Profit After Tax and Non-Controlling Interest stood at RM147.3 million in FY2016 compared to RM257.2 million recorded in FY2015, a decrease of approximately 43% mainly due to weaker performance of joint ventures and associates as well as the absence of several one-off items which were recorded in FY2015.
Property development revenue stood at RM1,611.5 million, or 88% of total revenue for FY2016, a slight decrease from RM1,617.9 million, or 92% of FY2015’s total revenue. Projects in the Central Region contributed 45% of the Company’s total revenue while projects in the Southern Region and International projects contributed 34% and 21% respectively. Unrecognised revenue as at 31 December 2016 stood at RM4.1 billion compared to RM4.7 billion as at 31 December 2015.
Total property development sales for the period under review was RM1,368.9 million, 37% higher than the Company’s sales target of RM1.0 billion, notably driven by projects in the Southern Region which contributed RM686.8 million or 50% of total sales compared to 12% in 2015 with Almás, the Company’s mixed integrated development in Puteri Harbour recording the highest sales at RM368.7 million, followed by Melia Residences, the Company’s first landed residential development in Gerbang Nusajaya of RM126.6 million.
Property sales for both Central Region and International business were 25% each of total sales for the period. Serene Heights Bangi, a mid-market residential township development in Selangor was the main contributor for the Central region. Conservatory, an exclusive high-rise residential development overlooking Carlton Gardens and Melbourne’s Royal Exhibition Centre in Australia was the main contributor to International sales.
The Board of Directors is not proposing any final dividend for the current financial year as the Company intends to conserve its cash balances to enable it to take advantage of landbanking opportunities in the near-term for future growth.
Commenting on the results, Anwar Syahrin Abdul Ajib, Managing Director/Chief Executive Officer of UEM Sunrise said, “Despite the tough current market environment influenced by a generally soft economy, weak consumers’ sentiment and tighter credit access, we noticed that affordable and landed mid-market type of residential developments are still the preferred choices of local buyers. Tapping on our vast landbank in both the Southern and Central Regions, we realised the opportunity and launched a series of affordable and mid-market products in both – Southern and Central Regions in 2016 and we are encouraged by our sales performance.”
“We are especially pleased with the improvement in sales for our projects in the Southern Region which showed an improvement in FY2016 particularly for Almás Suites and Almás Retail which saw a take-up of 91% as at end of January this year, inclusive of bookings. We feel that the current lively activity in Puteri Harbour in addition to its strategic location, waterfront living experience and potential future investment benefits, have surged the sudden interest in Almás. This marks an important milestone for us as it reflects the market’s renewed attitude and confidence towards high-rise and premium properties in the Southern Region, especially in Iskandar Malaysia”, he said.
On collaborations with other strategic partners, “We are always exploring opportunities to further add value to the Company for the benefit of our stakeholders. In early February this year, we signed up with Hong Kong-based Crown Worldwide Group (“Crown”), an information management, mobility, relocation and logistics expert, for the disposal of 4.1 acres of industrial land in Phase 3 of Southern Industrial and Logistics Clusters (“SILC”) for the development of a document storing facility with an investment value of approximately RM37 million. The investment by Crown will further create direct and indirect employment opportunities in Iskandar Puteri. We expect the launch of SILC Phase 3 will generate increased interest from investors to locate their facilities in Iskandar Puteri which will enhance the economic activity in the area.”
He further added, “In the Central Region, we signed a development agreement with the Malay College Old Boys Association (“MCOBA”) to undertake a mixed development project on MCOBA’s 2.65-acre land located along Jalan Syed Putra in Seputeh, Kuala Lumpur. With a GDV in excess of RM750 million, we are planning to develop two blocks of serviced apartments and for MCOBA, a new office building, business function suites and banquet hall. We believe the planned products from this development and its unique location will make this project a win-win development for both parties. Planning is currently underway.”
On the International front, Anwar revealed, “Our International projects will be key contributors over the next two years with our first two projects in Australia, Aurora Melbourne Central and Conservatory both practically sold out while construction is progressing as planned. Both projects will be handed over progressively in stages starting from late 2018 thereby enabling us to collect payments. We also look forward to the launch of our third project in Melbourne at St Kilda Road this year. Originally planned for launch in 2016, we are excited by the prospect of the project as the new design and development plan will be headed by the world-renowned Zaha Hadid Architects.”
For 2017, UEM Sunrise will remain cautious and is targeting to launch new projects with a combined GDV of RM1.7 billion with total property sales target of RM1.2 billion.