KUALA LUMPUR (Feb 22): UEM Sunrise Bhd returned to the black for the year ended Dec 31, 2022 (FY2022) after two years of losses, helped by a similar turnaround in the final quarter.
The property developer posted a net profit of RM20.46 million in 4QFY2022, against a net loss of RM150.98 million a year earlier, supported by lower operating expenses and higher other income.
This was despite a 28.41% drop in quarterly revenue to RM336.22 million from RM469.63 million in 4QFY2021, due to lower revenue contribution of RM42 million from the sale of industrial plots in Phase 3 of Southern Industrial & Logistics Clusters (SiLC) in Iskandar Puteri, Johor compared with RM192 million previously.
For the full financial year, UEM Sunrise registered a net profit of RM80.54 million versus a net loss of RM213.05 million in FY2021, in tandem with higher revenue, in addition to improvements in other income, scaled down operating expenses and better share of results from joint ventures and associates.
The group last recorded a profit in FY2019, when it posted a net profit of RM221.6 million, before slipping into the red with a net loss of RM277.28 million in FY2020 and RM213.05 million in FY2021.
Full-year revenue increased 24.39% to RM1.47 billion from RM1.18 billion. About 72% of the revenue came from property development activities, 21% from land sales and assets divestment, and the remaining 7% from property investments and others.
The group declared a dividend of 0.5 sen per share, amounting to RM25.3 million, payable on May 22.
UEM Sunrise reduced its inventories by 49% to RM203 million as at Dec 31, 2022, from RM396.9 million a year earlier. Its cash balances remained strong at RM1.02 billion while its net gearing remained moderate at 48%, as at Dec 31, 2022.
The group's chief executive officer, Sufian Abdullah, said the results for FY2022 was a testimony to the effectiveness of the initiatives taken under Triage, the first phase of its three-pronged strategic turnaround plan.
"Among the objectives under Triage was to ‘suture the bleed’ and better position ourselves for a long-term sustainable growth.
“We have successfully monetised our inventories, heightened our property development activities and improved our cashflow. We have also completed the bulk of the phase 3 SiLC sale and divested some non-strategic lands," he said in a statement.
Following the positive momentum of FY2022, the group plans to launch products worth RM2.5 billion in FY2023, while it set a sales target of RM1.5 billion for this year.
Going forward, Sufian said the group aims to strengthen its core business, ensuring that launch plans are intact, and target to have a healthier balance sheet.
The group is optimistic of its performance in FY2023, given its sound financial position with a net gearing of 0.48 times, and cash balances of RM1.02 billion as at Dec 31, 2022.
The group said its performance this year will also be supported by land sale transactions entered into the previous years. This includes the sale of the remaining land it owns in Tapah, Perak of 1,777 acres for RM75.5 million, and the sale of 67.7 acres in Gerbang Nusajaya, Iskandar Puteri for RM85.6 million.
“Both transactions were entered into in December 2022 and are expected to become unconditional in the current year, contributing towards this year's profitability,” it said.
UEM Sunrise has an unbilled sales of RM1.8 billion, which will be substantially recognised over the next 18 to 36 months.
Shares in UEM Sunrise closed up 0.5 sen or 1.96% at 26 sen on Wednesday, giving the group a market capitalisation of RM1.32 billion.