Friday, Feb 18, 2005
MARC has upgraded Sunrise’s short term debt rating from MARC-2ID to MARC-1ID, reflecting the company’s strong cash position, affording early redemption of the Bai’Bithaman Ajil Facility Tranche1; good financial track record with operating margins averaging 30% in the last four years; low debt leverage position and good financial flexibility with a current ratio of 0.32x and unencumbered assets worth RM323 million.
The upgrade was also underpinned by the company’s established position as a renowned and successful high-end condominium developer, with a list of new launches, promising strong cash flow generation capacity, going forward. The long-term rating meanwhile is reaffirmed at A+ID. Moderating factor would be the cyclical nature of the property industry.
Sunrise continues to perform commendably in FY2004 with four new launches under the Mont’Kiara and Seremban Forest Heights (SFH) development. Over the years, the company has earned itself an excellent reputation of being a renowned developer, evident in the commendable take-up rates of its projects in Mont’Kiara. Not only is Sunrise well known for its quality workmanship, the company has also consistently delivered its projects ahead of schedule.
On 18 May 2004, Sunrise entered into a conditional joint venture with MCL Land Limited (MCL), a Singapore based corporation, to jointly develop SFH which is managed under Sunrise’s subsidiary, Tropical Terrain Sdn Bhd (TT). The joint-venture which was approved on 15 December 2004 resulted in TT being 50% owned by MCL and 50% owned by Sunrise.
In terms of financial performance, Sunrise posted commendable results with revenue and pre-tax profit rising by 48.7% and 24.1% respectively driven mainly by the successful completion of Mont’Kiara Laman Suria and Mont’Kiara Damai development and higher sales from its Residence Phase II development. Revenue, going forward, is expected to be driven mainly by the existing/future developments in Mont’Kiara, consisting of condominium projects, service apartments, retail units and medical suites; projected to be launched throughout 2005-2007.
Operating profit is high by industry standards, registering 35.7% for FY2004. The ability to successfully maintain profitability can be attributed to the company’s low cost position as well as its ability to command a premium for its developments.
Sunrise’s debt leverage position improved to 0.45x in FY2004 due to a rise in shareholders’ funds, which in turn was attributed to the conversion of ICULS; higher share premium and higher retained earnings. Total debt level was marginally higher, up 8.9% attributed to a RM14 million drawdown of Islamic PDS facility during the fiscal year. As of end December 2004, Sunrise made an early redemption of the Bai’Bithaman Ajil facility Tranche 1 amounting to RM20 million. The early redemption of Tranche 1 (which matures only in June 2005) resulted in the company’s debt leverage position improving to 0.32x.
Net operating cash flow for FY2004 dropped 11.7% to RM50.7 million against the previous year due to higher receivables outstanding and increased payables. Consequently, CFO interest and debt coverage ratios declined to 3.4x (FY2003: 3.8x). Sunrise’s DSCR, nevertheless, rose marginally to a respectable 6.2x in fiscal 2004 following improved cash balances from last year.
The upgrade was also underpinned by the company’s established position as a renowned and successful high-end condominium developer, with a list of new launches, promising strong cash flow generation capacity, going forward. The long-term rating meanwhile is reaffirmed at A+ID. Moderating factor would be the cyclical nature of the property industry.
Sunrise continues to perform commendably in FY2004 with four new launches under the Mont’Kiara and Seremban Forest Heights (SFH) development. Over the years, the company has earned itself an excellent reputation of being a renowned developer, evident in the commendable take-up rates of its projects in Mont’Kiara. Not only is Sunrise well known for its quality workmanship, the company has also consistently delivered its projects ahead of schedule.
On 18 May 2004, Sunrise entered into a conditional joint venture with MCL Land Limited (MCL), a Singapore based corporation, to jointly develop SFH which is managed under Sunrise’s subsidiary, Tropical Terrain Sdn Bhd (TT). The joint-venture which was approved on 15 December 2004 resulted in TT being 50% owned by MCL and 50% owned by Sunrise.
In terms of financial performance, Sunrise posted commendable results with revenue and pre-tax profit rising by 48.7% and 24.1% respectively driven mainly by the successful completion of Mont’Kiara Laman Suria and Mont’Kiara Damai development and higher sales from its Residence Phase II development. Revenue, going forward, is expected to be driven mainly by the existing/future developments in Mont’Kiara, consisting of condominium projects, service apartments, retail units and medical suites; projected to be launched throughout 2005-2007.
Operating profit is high by industry standards, registering 35.7% for FY2004. The ability to successfully maintain profitability can be attributed to the company’s low cost position as well as its ability to command a premium for its developments.
Sunrise’s debt leverage position improved to 0.45x in FY2004 due to a rise in shareholders’ funds, which in turn was attributed to the conversion of ICULS; higher share premium and higher retained earnings. Total debt level was marginally higher, up 8.9% attributed to a RM14 million drawdown of Islamic PDS facility during the fiscal year. As of end December 2004, Sunrise made an early redemption of the Bai’Bithaman Ajil facility Tranche 1 amounting to RM20 million. The early redemption of Tranche 1 (which matures only in June 2005) resulted in the company’s debt leverage position improving to 0.32x.
Net operating cash flow for FY2004 dropped 11.7% to RM50.7 million against the previous year due to higher receivables outstanding and increased payables. Consequently, CFO interest and debt coverage ratios declined to 3.4x (FY2003: 3.8x). Sunrise’s DSCR, nevertheless, rose marginally to a respectable 6.2x in fiscal 2004 following improved cash balances from last year.