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Wednesday, October 29, 2008

Sunrise is confident RM1.3bil in unbilled sales can sustain performance over three years

KUALA LUMPUR: Despite softer conditions in the property market, Sunrise Bhd expects to perform well in the next two to three years due to its high unbilled sales of RM1.36bil.

Executive deputy chairman Datuk Allan Lim Kim Huat said the sales were equivalent to about 2.6 times its average annual income over the past three years.

He said these sales came from four ongoing projects, namely 10 Mont’ Kiara (MK10), 11 Mont’ Kiara (MK11), Solaris Dutamas and The Residence.

“With these projects as well as three new projects in the pipeline, I think we will do fine in the next two to three years,” he told reporters after the company’s AGM yesterday.

Unbilled sales are similar to order books of construction companies; both refer to sales secured from customers but not yet booked as revenue in the profit and loss account.

As at July,Sunrise had sold 93% of MK10 units, 45% of MK 11, 92% of Solaris Dutamas, 9% of The Residence Phase 2B, 90% of Mont’ Kiara Meridin, 95% of Mont’ Kiara Banyan, and 100% of Kiara Designer Suites-Kiara Walk.

“We are quite busy constructing and delivering to buyers units in the ongoing projects.

“Although things are a little uncertain due to the economic slowdown, the next three years will be a busy period for us,” he said.

Lim added that Sunrise foresaw the pressure on margins easing given the recent plunge in commodity prices.

However, the company plans to defer the launch of its three new projects in view of weaker demand.

The three projects are a six-star condominium development called 28 Mont’ Kiara, two office blocks at Solaris Tower in Kuala Lumpur, and the first phase of a residential development in Vancouver, Canada.

“We are not under pressure to launch any project, as we want to launch them at the right time and at the right price,” he said.

Although there is a slowdown in demand, Lim does not see any major financial problems for the buyers.

“It is just that they are more careful making investments and have a wait-and-see attitude,” he said.

Originally, Sunrise had planned to launch the two office blocks and 28 Mont’ Kiara by year-end while the Canadian project was expected to be launched by February or March 2009.

Lim said all new launches would depend on market conditions.

He added that it might launch the Vancouver project, next year. The project has an estimated gross development value of C$350mil .

By The Star

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