MARC has assigned MARC-1ID for Sunrise’s Islamic Commercial Paper issuance programme and A+ID for Islamic MTN issuance programme with value of up to RM150 million. The ratings reflect Sunrise’s good financial track with operating margins averaging 23% in the last four years, low debt leverage position and good financial flexibility. The assigned ratings were also underpinned by the company’s established position as a high-end developer, with several new launches and good cash flow generation capacity, going forward. Moderating factors would be the cyclical nature of the property industry, the sensitivity of the cash flow to changes in the revenue stream and the potential impact on Sunrise’s profit margins due to their limited land bank in Mont’Kiara. Nevertheless, projects that have been launched on these developed lands are projected to continue contributing substantially over the next few years till 2011. Sunrise has also, more recently, purchased a few parcels of land and entered into joint-venture agreements with certain land owners in Mont’Kiara, in order to continue expanding its land inventory.

Sunrise continues to be one of the leading developers of high end properties which are mostly located in its flagship development, Mont Kiara. Having a strong brand name, quality finishing, award winning designs, timely delivery of products and its ability to price its properties at a premium to its competitors are attributes that will enable Sunrise maintains its competitive edge, evidenced by the good take up rates in most of its projects in Mont Kiara.



For FY2005, the group has shown improved performance by recording a 41.9% growth in revenue compared to the previous year. In line with the increase in revenue, operating margin has also shown vast improvement for FY2005 with a margin of 43.4% compared to 23.9% for FY2004. The improvement in the operating margin for FY2005 was attributable to higher progress billings derived from the Mont’ Kiara Aman and Damai projects.

For the nine months ended 31 March 2006, the unaudited results of the group reported revenue and pre-tax profit of RM240 million and RM91 million respectively compared to RM237 million and RM105 million in the previous corresponding period. These represent a 1% increase in revenue and 13% drop in pre-tax profit as compared to the previous period’s results. The decrease in profit was mainly due to the recognition of the final stage billings of 2 highly successful projects, Mont Kiara Damai and Mont Kiara Aman in the previous corresponding period. Additionally, profit recognition from the newly launched projects is slow as the projects are at the initial stages of construction whereby basement and foundation work for large scale mixed-use projects require longer lead time. Going forward, as construction progresses, stage billings and profit recognition are expected to increase.

The group’s cash flow from operations has posted a significant improvement to RM45 million for FY2005 compared to RM36 million for FY2004. The increase is mainly due to the higher funds from operation before working capital changes which improved to RM157 million compared to RM63 million for FY2004. In line with the increase in cash flow from operations, CFO interest coverage has also shown an improvement with interest coverage of 4.49x for FY2005 compared to 3.40x for FY2004.

Overall, the group’s debt leverage has been stable for the last two years in review. The favourable debt leverage position is also well within the 1.0 time debt-equity cap stipulated under the issue structure. Proforma debt to equity assuming a RM150 million drawdown is 0.63x which is below the covenanted debt-equity level. Projected financial position shows a relatively low debt-equity position for the tenure of the facility.