Sunway Bhd saw its net profit for the first quarter ended 31 March drop 42.6% to RM78.29 million from RM136.41 million over the same period last year, on the back of lower contributions from most of its business segments except quarrying and property development.
Revenue stood at RM971.44 million, lower than last year’s RM1.12 billion, reported The Sun Daily.
This comes as the movement control order (MCO), as well as the subsequent conditional MCO, caused significant financial impact and disruptions to the group, especially the leisure and hospitality businesses, which were unable to operate during these periods.
“Although most of the other businesses of the Group have resumed operations during the conditional MCO, the anticipated business recovery will be challenging and dependent on the overall improvement of the broader economy,” said the group in a statement.
With this, Sunway had activated its business continuity plan which included its digital platform to help it manage the operational disruptions brought about by the Covid-19 pandemic and the MCO. The group has also adopted several cost-saving measures, such as recruitment freeze.
Separately, the group had proposed to issue up to 1.11 billion new irredeemable convertible preference shares (ICPS) on the basis of one ICPS for each five existing ordinary shares within Sunway at RM1 issue price.
The rights issue’s expected gross proceeds is RM1.11 billion under the maximum scenario and RM980.3 million under the minimum scenario.
The bulk of the proceeds will be used to repay borrowings, while the rest will be used to fund property development and capital expenditure.
The exercise is set to be completed by Q4 of this year.