Sunway Berhad announced its third quarter financial results for the period ended 30 September 2018. The Group recorded revenue of RM1.44 billion and profit before tax of RM194.0 million for the current quarter ended 30 September 2018 compared to revenue of RM1.28 billion and profit before tax of RM188.9 million in the corresponding quarter of the previous financial year.
The increase in revenue of 12.6% was due to higher contributions from most business segments, while profit before tax was higher by 2.7% mainly due to higher contributions from the property development and construction segments.
Profit before tax was higher despite the adoption of MFRS 15. With the adoption of MFRS 15, recognition of progressive profits of RM57.1 million from one of the Group's Singapore and China property development projects, which could have been recognised in the current quarter under the progressive revenue recognition treatment, has to be deferred until its completion. Excluding the effects of the adoption of MFRS 15 in the current quarter, the Group's profit before tax would have been up by 32.9% from the previous year's corresponding quarter.
“The Group's satisfactory performance demonstrates the resilience of our businesses. With a recovery in consumer and business confidence expected going forward, we are confident of delivering a satisfactory performance for the last quarter of this year,” said Chong Chang Choong, Chief Financial Officer of Sunway Berhad.
The Group's property development segment reported revenue of RM194.8 million and profit before tax of RM40.9 million in the current quarter compared to revenue of RM125.5 million and profit before tax of RM31.3 million in the corresponding quarter of the previous financial year, representing an increase in revenue of 55.1% and profit before tax of 30.5%.
The improved performance is due to higher sales and progress billings from local development projects, further boosted by the completion and handover of a local development project during the quarter.
Sarena Cheah, Managing Director of Sunway Berhad's property development division remarked, “We are very pleased to share that the property development segment has exceeded its sales target of RM1.3 billion set for this year, recording total sales of RM1.6 billion as of the current quarter on the back of the successful launches in the second half of 2018. We are now revising our sales target for FY 2018 to RM1.7 billion.”
The Group's recent launch of Sunway Velocity TWO in October 2018 was met with positive responses, garnering a bookings rate of 80% within a month. The transit-oriented development has direct links to 3 MRT and 2 LRT stations, and is directly adjacent to the fully integrated development of Sunway Velocity.
Property unbilled sales stood at RM2.1 billion as at 30 September 2018, providing earnings visibility for the Group.
The property investment segment reported revenue of RM237.8 million and profit before tax of RM54.6 million in the current quarter compared to revenue of RM225.4 million and profit before tax of RM58.1 million in the corresponding quarter of the previous financial year.
The increase in revenue of 5.5% in the current quarter was mainly due to additional contribution from new properties such as Sunway Velocity Hotel and Sunway Geo in Sunway South Quay, as well as improved contribution from Sunway Velocity Mall and the Group's theme parks.
The construction segment recorded revenue of RM465.4 million and profit before tax of RM49.8 million in the current quarter compared to revenue of RM416.6 million and profit before tax of RM44.9 million in the corresponding quarter of the previous financial year, representing an increase in revenue of 11.7% and profit before tax of 10.7%.
The financial performance of the segment in the current quarter was better mainly due to higher progress billings from local construction projects. The construction outstanding order book stood at RM5.2 billion as at 30 September 2018.