Press Release by Sunway Berhad: SUNWAY POSTS STEADY RESULTS

This is a Press Release by Sunway Berhad on its financial year ending 31st December 2016. 

SUNWAY POSTS STEADY RESULTS

  • Higher year-on-year revenue contributed by better performance in most segments
  • Property development profit before tax for the year increased 24.8% to RM327.8 million
  • Property investment revenue increased 8.3% due to higher rental contributions, better occupancies and increase in number of visitors to Sunway Lagoon
  • Strong construction outstanding order book of RM4.8 billion and property unbilled sales of RM1.5 billion

Bandar Sunway, 27 February 2017 – Sunway Berhad, one of Malaysia’s largest conglomerates with core interests in real estate and construction, today reported an increase in revenue to RM4,725.9 million for the current 12 months period ended 31 December 2016 compared to RM4,448.4 million over the corresponding period last year. The increase in revenue was contributed by better performance in the property development, property investment, trading and manufacturing, healthcare, building materials and treasury operations.

Sunway declared a second interim cash dividend of 4 sen per share along with a share dividend distribution of 1 treasury share for every 100 existing ordinary shares held translating to an equivalent of 3.14 sen per share. Total full year dividend, including the first interim dividend paid of 5 sen per share, is 12.14 sen per share- up from 11 sen the previous year.

“While the economic environment remains challenging, our robust balance sheet will enable us to capitalize on any opportunities that may arise in such an operating environment, especially given that Sunway is a well-diversified group,” said Mr. Chong Chang Choong, CFO of Sunway Berhad.

The Group posted a slightly lower profit before tax of RM859.0 million in the current period compared to RM930.4 million in the corresponding period last year. However, this was due to lower fair value gains from the revaluation of investment properties and a share of lower fair value gains recorded by Sunway REIT. The combined fair value gains were approximately RM105.3 million lower in the current period compared to the corresponding 12 months period last year. The difference in profit before tax was also attributable to RM22.9 million capital gains from the disposal of two investment properties to Sunway REIT in the first quarter of 2015.

The property development segment reported revenue of RM1,209.4 million and profit before tax of RM327.8 million for the current 12 months period ended 31 December 2016 compared to revenue of RM1,195.7 million and profit before tax of RM262.6 million for the corresponding period last year. The increase was mainly due to higher profit recognition from local projects, sale of land to Sunway REIT and the completion of several local development projects during the current period.

The Group targets to roll out RM2.0 billion worth of properties in 2017. The launches for the year are well-spread across multiple strategic locations with good connectivity, and diversified across the residential, commercial and industrial segments. The property development segment’s unbilled sales as at 31 December 2016 of RM 1.5 billion will provide earnings visibility for the division over the next 1-2 years. The segment is also well positioned to actively pursue strategic land banking, having recently acquired a 8.45-acre land directly opposite the Group’s RM4.0 billion Sunway Velocity development in February.

The property investment segment recorded revenue of RM692.0 million and profit before tax of RM158.7 million for the current 12 months period ended 31 December 2016 compared to revenue of RM638.9 million and profit before tax of RM315.6 million for the corresponding 12 months period in the previous financial year. Revenue was higher in the current period due to higher rental contribution and better occupancy at the Group’s portfolio of investment properties, and an increase in the number of visitors to Sunway Lagoon following the opening of Nickelodeon Lost Lagoon in 2016. Profit before tax was lower mainly due to lower fair value gains from revaluation of investment properties and Sunway REIT properties, which saw a drop of approximately RM105.3 million in the current year compared to the preceding year. Profit before tax was also impacted by pre-opening expenses incurred for Sunway Velocity Mall which was opened in December 2016, provisions made for the termination of Sunway International Vacation Club, and impairment for the BRT Park N’ Ride facilities, totaling approximately RM40 million. In absence of the additional costs and provisions above, the profit before tax of the division in the current period would be only slightly lower than the corresponding period of the previous financial year.

The construction segment reported revenue of RM1,183.1 million and profit before tax of RM134.1 million for the current 12 months period ended 31 December 2016 compared to revenue of RM1,222.1 million and profit before tax of RM162.7 million for the corresponding 12 months period ended 31 December 2015. The lower revenue was due to lower revenue recognition from local construction projects and higher intra-group eliminations in the current period. Profit before tax in the current period was lower in line with the lower revenue. Nevertheless, strong growth is expected for the segment as the construction outstanding order book remains healthy at RM 4.8 billion, with order book replenishment in 2016 of RM 2.7 billion, higher than the management’s target for the year of RM 2.5 billion.

— End of Press Release —

Next suggested article:  Sunway Berhad’s Q3: Higher net profit and low-gearing

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