Tuesday, May 25, 2004
The upgrade of Sunrise Berhad’s (Sunrise) long-term rating of AID to A+ID reflects the company’s position as an established and successful condominium developer, evident from its signature development in Mont’Kiara (MK); strong financial position coupled with promising cash flow generation capacity, going forward. The short term rating has been maintained at MARC-2ID.
Sunrise’s rating upgrade follows the success of its signature development, Mont’Kiara. Its excellent reputation was proven as the company recorded excellent take-up rates in six completed condominium projects namely, Pines, Palma, Pelangi, Sophia, Astana and Bayu; and one commercial retail block, Plaza Mont’Kiara, under the Mont’Kiara township. Besides being renowned for its quality workmanship, the company has also consistently delivered projects ahead of schedule. The average time taken to complete its projects is approximately 2½ years.
Property development, being the core activity of the group contributes over 90% of total revenue. Income from managing the condominium projects which generates about 4% of total revenue, lends an element of stability to the company’s income stream. Meanwhile, Sunrise’s other businesses include interior design consultancy and the provision of education services.
Fiscal 2003 was another good year for Sunrise as the company registered a post-tax profit of RM29.9 million (19.5% growth) on the back of RM174.3 million (4.9% growth) in revenue. Aided by its low cost position as well as the ability to command a premium for its developments, Sunrise’s profitability levels are considered high by industry standards averaging 35.5% in the last four years.
Revenue for the year was driven mainly by the MK Damai and MK Laman Suria developments. In year 2003, Sunrise launched two new developments in Mont’Kiara namely MK Aman and The Residence (Phase 2) with the former consisting of condominium developments and the latter bungalow units.
Sunrise’s interest and debt servicing capacity exhibited improvement in fiscal year 2003; registering levels of 3.2x and 6.0x respectively during the year. Debt servicing ability is anticipated to remain strong with projected debt service coverage averaging 4.9x during the tenure of the facility.
Sunrise’s cash flow generation capacity is expected to be driven mainly by the developments in MK over the next eight to ten years, which is expected to outweigh the moderate response to Sunrise’s Seremban Forest Heights (SFH) in Negeri Sembilan. Nevertheless, the slow response to the SFH development is not expected to pose a problem to the company due to the minimum holding cost involved.
Sunrise has posted commendable gearing levels of 0.46x on average for the past four years. The ratio is expected to gradually decline from 2004 onwards (provided that no additional debt is undertaken) aided mainly by the company’s strong earnings retention as well as increased share capital of 74.16 million shares from the conversion of ICULS on 8 March 2004.
Sunrise’s rating upgrade follows the success of its signature development, Mont’Kiara. Its excellent reputation was proven as the company recorded excellent take-up rates in six completed condominium projects namely, Pines, Palma, Pelangi, Sophia, Astana and Bayu; and one commercial retail block, Plaza Mont’Kiara, under the Mont’Kiara township. Besides being renowned for its quality workmanship, the company has also consistently delivered projects ahead of schedule. The average time taken to complete its projects is approximately 2½ years.
Property development, being the core activity of the group contributes over 90% of total revenue. Income from managing the condominium projects which generates about 4% of total revenue, lends an element of stability to the company’s income stream. Meanwhile, Sunrise’s other businesses include interior design consultancy and the provision of education services.
Fiscal 2003 was another good year for Sunrise as the company registered a post-tax profit of RM29.9 million (19.5% growth) on the back of RM174.3 million (4.9% growth) in revenue. Aided by its low cost position as well as the ability to command a premium for its developments, Sunrise’s profitability levels are considered high by industry standards averaging 35.5% in the last four years.
Revenue for the year was driven mainly by the MK Damai and MK Laman Suria developments. In year 2003, Sunrise launched two new developments in Mont’Kiara namely MK Aman and The Residence (Phase 2) with the former consisting of condominium developments and the latter bungalow units.
Sunrise’s interest and debt servicing capacity exhibited improvement in fiscal year 2003; registering levels of 3.2x and 6.0x respectively during the year. Debt servicing ability is anticipated to remain strong with projected debt service coverage averaging 4.9x during the tenure of the facility.
Sunrise’s cash flow generation capacity is expected to be driven mainly by the developments in MK over the next eight to ten years, which is expected to outweigh the moderate response to Sunrise’s Seremban Forest Heights (SFH) in Negeri Sembilan. Nevertheless, the slow response to the SFH development is not expected to pose a problem to the company due to the minimum holding cost involved.
Sunrise has posted commendable gearing levels of 0.46x on average for the past four years. The ratio is expected to gradually decline from 2004 onwards (provided that no additional debt is undertaken) aided mainly by the company’s strong earnings retention as well as increased share capital of 74.16 million shares from the conversion of ICULS on 8 March 2004.