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UEM Sunrise Berhad Announces Financial Results For The Year Ended 31 December 2020

KUALA LUMPUR, 24 March 2021 – UEM Sunrise Berhad (“UEM Sunrise” or the “Company”) today announced its financial results for the financial year ended 31 December 2020 (“FY2020”). The COVID-19 pandemic and the Movement Control Order implemented in March 2020, have caused disruptions in the Company’s operations affecting retail businesses, construction progresses as well as sales and marketing activities; impacting the Company’s overall revenue contribution and profitability.  

For the year under review, UEM Sunrise recorded a revenue of RM1.2 billion compared to prior year’s revenue of RM2.9 billion. FY2020’s revenue is driven by higher contribution from Solaris Parq Residences in Dutamas, Serene Heights Bangi, Aspira ParkHomes in Gerbang Nusajaya and the settlement of the sale of the en-bloc service apartment in Aurora Melbourne Central to Scape Australia Management Pty Ltd in Melbourne. 

In line with the Government’s 2020 Home Ownership Campaign, UEM Sunrise initiated ‘The Happy Chase’ campaign in July 2020 which helped in boosting sales in the second half of 2020 resulting in total sales of RM1.1 billion in 2020. Main contributions came from Residensi AVA, Kiara Bay and Residensi Solaris Parq, Dutamas both in the Central region as well as Estuari Gardens, Puteri Harbour. The sale of the industrial plots in phase 3 of the Southern Industrial Logistics Clusters in the Southern region also contributed to the year’s sales. The Company launched projects with a total Gross Development Value or GDV of approximately RM900 million in 2020 mainly in the Central region. Its unbilled sales as at 31 December 2020 is RM1.9 billion.

The Company’s performance in the fourth quarter of 2020 improved tremendously compared to the first nine months of FY2020 as construction activities improved with sales steadily picking up. Revenue in the fourth quarter was over and above the total revenue of the first nine months combined. Sales in the same quarter represented 67% of the 2020 total sales. 

The Company recorded a net loss after non-controlling interests of RM277 million for the financial year following the lower revenue and after making provisions for impairments of its assets and inventories of RM93 million. Poorer contribution from joint ventures and associates as well as additional impairment of assets at these companies, amongst others, further compounded the Company’s overall position. The pandemic has affected economic activities and growth in all sectors. Assets and inventories now have lower net realisable value requiring appropriate impairment provisions. These impairments however have no effect on the Company’s cashflow position.

Commenting on the financial results, Sufian Abdullah, Chief Executive Officer of UEMSunrise said, “2020 has been a challenging year for UEM Sunrise given the impact of the COVID-19 pandemic which resulted in limited business activities. Following resumption of site activities in June 2020, the opening of our sales galleries and the positive attitude our organisation embraced in learning to adapt to the new norm – we saw positive gradual movement in the market. The outcomes were captured in the second half of 2020 which supported the Company’s performance for 2020. Unfortunately, the impact of the pandemic and the unavoidable impairment provisions affected the group’s profitability for the period.”

In terms of new product launches in 2021, “We plan to launch approximately RM1.2 billion worth of properties mainly in the Central region. We will introduce two new mid-market high-rise residences; KAIA Heights in Seri Kembangan at a GDV of RM350 million and a new development with a GDV of RM382 million in Taman Pertama, Cheras. We will also launch more double storey homes in our prized Serene Heights Bangi. Frischia was launched in June 2020. As at to-date, all 47 units have been taken up. Then we launched 72 units of Verna in October 2020. As at to-date, 88% has been sold. In the Southern region, we plan to introduce more attainable products that will extend our product outreach to the local market. This will be in the form of high-rise residences in Senadi Hills at 1,400 square feet. Additionally, affordable landed homes with built-up area of 1,000 square feet and priced at RM150,000 per unit will be launched in Gerbang Nusantara.

He further added, “KAIA Heights in Equine Park was recently launched. The first phase comprises two blocks of 517 condominium units sized between 972 to 1,437 square feet priced from RM567,800 per unit. Positioned in the mature neighbourhoods of Seri Kembangan with easy access to a number of major highways and located near the Sungai Buloh-Serdang-Putrajaya MRT line, we are excited at the prospect of the project and look forward to a positive market response.”

He continued, “We recently acquired three parcels of land of approximately 10 acres in Section 13, Petaling Jaya; our first foray into the area; with plans to develop a mixed commercial project at an estimated GDV of RM1.3 billion. This is in line with our growth plans to rebalance our landbank portfolio and at the same time, strengthen our presence in the Central region. We will continue to seek out strategically located lands with short turnaround time in response to customer needs and market demands.”

Touching on Australia, “We take comfort that the sale of the en-bloc serviced apartment to Scape was finally settled in October 2020, contributing positively towards our FY2020 total revenue. With regards to Aurora Melbourne Central and Conservatory, we anticipate to complete full settlement of both projects this year. The settlement of these projects is close to 100%. Settlement was affected by the Australian border closure and lockdown in the State of Victoria in the second half of 2020. In the interim, we continue to increase our foothold in Melbourne, by acquiring a 1.3-acre land in Collingwood which is currently in the early stages of design development. With an estimated GDV of AUD250 million, we anticipate launching the project in the first half of 2022.”

UEM Sunrise remains financially sound given the low net gearing of 0.40x with cash balances of RM1.3 billion as at the end of FY2020 amidst the uncertain challenging market environment. It supports the Government’s COVID-19 vaccination programme, anticipating an effective rollout across the country. This will increase population mobility and support economic activities which will lead to an overall economic recovery in 2021. The Company is cautiously optimistic on the outlook and is pursuing GDV and sales targets of RM1.2 billion respectively for 2021.