BRIGHT OUTLOOK: Melbourne project, landbank sale to enable UEM Sunrise to beat target
UEM Sunrise Bhd, one of the country’s biggest property developers, may exceed its RM2 billion sales target this year, driven by its maiden residential project in Melbourne, say analysts.
They also expect the company to dispose of some of its landbank in Johor by the end of the year.
UEM Sunrise is expected to start construction of the Aurora Melbourne Central on La Trobe Street in Melbourne early next year.
The massive 92-floor skyscraper with 941 serviced apartments will have a gross development value of A$770 million (RM2.23 billion).
As at last Friday, 403 units worth A$202 million had already been snapped up.
“I understand that UEM Sunrise is also looking to or is in the midst of selling some of its landbank in Johor. If this happens, then its sales for this year could surpass RM2.5 billion,” said one of the analysts.
UEM Sunrise had slashed its full-year sales target to RM2 billion from RM3.2 billion due to a challenging market environment and weaker financial results in the second quarter ended June 30.
“I am not sure whether the project has saved the day but I think the company should have foreseen this when revising down the guidance,” he added.
In the second quarter, net profit declined 30.6 per cent year-on-year (y-o-y) to RM74.5 million from RM107.3 million previously, mainly due to cost revision made in certain projects.
Revenue dropped 5.9 per cent y-o-y to RM447.6 million from RM475.9 million previously due to lower property development income.
For the first half of the year, UEM Sunrise posted a net profit of RM136.05 million, down from RM318.42 million previously, while revenue was RM849.18 million versus RM1.17 billion in the same period a year ago.
UEM Group managing director and chief executive officer Datuk Izzaddin Idris said recently that UEM Sunrise’s total sales stood at RM560 million as at end-August, while unbilled sales were RM3 billion.
He added that the Melbourne project was expected to contribute 25 per cent to the company’s total targeted sales, while 60 per cent would come from projects in Nusajaya and the balance from developments in the Klang Valley.