Improved contributions from most segments lift Sunway’s 2Q net profit by 140%

KUALA LUMPUR (Aug 24): Sunway Bhd’s net profit for the second quarter ended June 30, 2022 (2QFY22) jumped 140% to RM168.88 million from RM70.52 million in 2QFY21, boosted by strong operating contributions from most business segments.

Quarterly revenue climbed 67% to RM1.28 billion from RM767.3 million, the diversified group told Bursa Malaysia. Earnings per share more than doubled to 2.88 sen, from 1.2 sen.

The group declared a first interim single-tier cash dividend of two sen per share, to be paid on Oct 6.

According to Sunway, profit before tax (PBT) for its property development segment grew 12.4% to RM25.7 million from RM22.9 million, due to progressive profit recognition from one of the group’s Singapore private condominium projects and reversal of overprovision in development cost in one of its overseas joint venture (JV) companies.

Revenue from the segment ballooned 94.3% to RM286.4 million from RM147.4 million, on higher progress billings from ongoing local development projects and revenue recognition from two JV companies which became subsidiaries in the previous quarter, namely Sunway Artessa and Sunway Velocity Two.

Its property investment segment recorded a PBT of RM53.4 million versus a loss before tax (LBT) of RM16 million, boosted by net gain from disposal of one of its property investment assets and stronger performance of its associate company, Sunway REIT. Revenue jumped to RM149.6 million from RM62.3 million, attributed to higher visitorship to the theme parks and higher occupancy rates at the group’s hotels.

The group’s construction segment recorded a revenue of RM316.8 million and PBT of RM44.4 million in the current quarter, compared with a revenue of RM218.1 million and PBT of RM8.6 million in the corresponding quarter of the previous financial year, representing an increase in revenue of 45.3% and profit before tax of 414.7%. Sunway attributed the improved financial performance to higher progress billings from local construction projects.

Others segments posted a revenue of RM161.6 million (up from RM70.2 million) and PBT of RM44.7 million (up from RM28.6 million), mainly contributed by the improved operating performance of the building materials segment and the community pharmacy business, boosted by a gain on disposal of RM26.6 million of one of the group's new start-up investments.

For the six months ended June 30 (6MFY22), Sunway’s cumulative net profit stood at RM309 million, more than double than the RM128.97 million in 6MFY21. Six-month cumulative revenue grew 48.3% to RM2.39 billion, from RM1.61 billion.

Sunway group chief financial officer Chong Chang Choong said the group expects to continue to benefit from the ongoing economic recovery, particularly its leisure and hospitality segments, due to improving domestic tourism demand and higher tourist arrivals.

In addition, the healthcare segment will also benefit from the recovering medical tourism sector, as international travel start to normalise, he said in a statement.

“While there may be downside risks to the recovery going forward due to rising inflationary expectations and higher interest rates, the domestic economy is expected to be able to weather the headwinds and sustain its growth momentum.

“Barring any unforeseen circumstances, the financial performance of the group is expected to be satisfactory for FY22,” he added.

At the closing bell on Wednesday (Aug 24), Sunway’s share price was up one sen at RM1.66, translating into a market value of RM8.19 billion.