UEM Sunrise Bhd managing director Anwar Syahrin Abdul Ajib presenting during the briefing to the media on the company’s Q2 FY2019 financial performance.

KUALA LUMPUR: UEM Sunrise Bhd (UEM Sunrise) announced its financial results for the six months ended 30 June 2019 (1H 2019) where total revenue recorded for the period increased to RM1,419.8mil compared to RM861.1mil in the first half of 2018 (1H 2018).

This is mainly driven by the completion and settlement of Aurora Melbourne Central’s separable portions (SP) SP3 and SP4 and Conservatory’s SP1, SP2 and SP3 in Melbourne, Australia. Excluding a one-off impairment of RM37.3mil, profit after tax and non-controlling interests stood at RM107.8mil for the period.

In the absence of significant earnings contribution from land sales in this period compared to 1H 2018 amounting to RM207.3mil, property development earnings contribution improved from RM41.2mil to RM107.8mil.

Property development activities contributed 95% of the UEM Sunrise’s total revenue for the period, with 73% from international projects mainly Aurora Melbourne Central and Conservatory followed by 15% from Central, the likes of Sefina Residences in Mont’Kiara, Symphony Hills in Cyberjaya and Serene Heights Bangi.

The remaining 13% was from the southern region, largely from Serimbun, Almas@Puteri Harbour and Aspira LakeHomes, in Iskandar Puteri. As of 30 June 2019, UEM Sunrise’s unbilled sales stood at RM2.6bil.

Property development sales for 1H 2019 was RM532mil; 52% contributed by the central region mainly from Symphony Hills, Residensi Astrea in Mont’Kiara and Serene Heights Bangi. The other 44% came from the southern region, largely from Aspira ParkHomes, Almas@Puteri Harbour and Denai Nusantara.

To-date, UEM Sunrise has launched properties with a total gross development value (GDV) of RM249.3mi,l comprising mid-market double-storey terrace homes—Serene Heights Bangi’s Dahlia phase two in May 2019 and Aspira ParkHomes’ phases one and two in January and June 2019, respectively. Commenting on the financial results, Anwar attributed the company’s revenue largely towards the projects in Melbourne, Australia.

“The successful completion of Aurora Melbourne Central, the 88-storey mixed-use development comprising 959 residential apartments, 252 serviced apartments and office suites, a total GDV of AUD750mil, as well as the positive settlement of its SP3 and SP4, which today stands at 99%, is evidence that the decision to venture into Australia, our maiden international foray, was one of UEM Sunrise’s best decisions,” he explained.

According to the press release, SP5 is expected to be handed over for settlement in October 2019. For the AUD322mil Conservatory, the settlement rate to-date is 78%.

“In relation to Mayfair, we have decided to divest the site to realise its immediate potential value. The proposal has garnered interest from several potential buyers, and we plan to complete the transaction before year-end,” said Anwar, adding that it is the company’s top priority to inform buyers of the decision, and will terminate the sale and purchase agreements as well as refund the deposits plus interest accordingly.

With regards to UEM Sunrise’s sales status, Anwar said that the company’s participation in the Home Ownership Campaign 2019 has been positive for properties like Serene Heights Bangi, Serimbun, Aspira LakeHomes, Aspira ParkHomes.

“We hope to secure more sales as the campaign has been extended towards year-end. Our inventory monetisation efforts are also on track considering that 35% of our sales for the period was from completed properties,” he explained.

In terms of new launches, the bulk of the sales was from Aspira ParkHomes, a gated and guarded urban green living in Gerbang Nusajaya, located near the Gerbang Nusajaya Interchange which connects to the Linkedua Expressway and Tuas, Singapore.

The interchange is under construction and slated for completion in October 2020. 155 units were launched, each with an average built-up of 2,000 sq ft, and priced from RM529,000 per unit. To date, the take up of phase one is at 74% while phase two records a take-up of 58%.

“We are also on track to unveil our prized Kepong Metropolitan development in 4Q 2019 where we plan to launch two residential blocks and retail at an estimated GDV of RM656mil,” Anwar said.

In relation to developments in Johor, UEM Sunrise will be acquiring retail assets and a theme park building owned by Themed Attractions Resorts & Hotels Sdn Bhd in Puteri Harbour. The company plans to improve the asset’s overall design and secure the right tenant mix to increase vibrancy and footfall.

“This is expected to unlock Puteri Harbour’s development potential and allow us to achieve operational cost savings. The acquisition of the assets will also see us reducing our exposure in Desaru by developing 228 acres of residential lands as opposed to the original 680 acres. The settlement amount derived from the arrangement will be used to partly set-off the acquisition price of the assets. We target to complete the transaction in the fourth quarter of 2019,” Anwar elaborated.

Anwar said the asset divestment and land portfolio rebalancing strategies of the company are ongoing, with efforts to consolidate margins through smart spending initiatives, project cost savings and containment of operational overheads. The company is also mindful of the challenging market environment and remain prudent in their GDV and sales target of RM1.2bil each.