With the loan moratorium set to expire by the end of this month, Sunsuria Bhd believes the worst is yet to come for the property sector.
A six-month moratorium was introduced by Bank Negara Malaysia on the repayment of personal loans and financing, effective 1 April, due to the Covid-19 pandemic, reported the New Straits Times (NST).
About eight million Malaysian companies and individuals have reportedly benefitted from the loan moratorium that is valued at RM74.3 billion.
And with all loan/financing repayment set to resume in October, the government has yet to make an announcement on whether it will extend the moratorium for another six months even as the Recovery Movement Control Order period was extended until 31 December 2020.
Sunsuria shared that it is aware of the inherent risk coming from lingering uncertainties on the possibility of another wave of Covid-19 infections.
As such, the company had been cautious on project launches.
Its property projects registered lower sales this year, causing its net profit for the nine months to 30 June 2020 to drop by 82% to RM20.96 million, from RM115.74 million over the same period last year.
Sunsuria’s revenue also declined 68% year-on-year to RM135.78 million during the period under review, from RM429.45 million previously.
For Q3 ended 30 June 2020, revenue stood at RM20.2 million, down from the RM68.08 million revenue posted during the previous quarter.
Net profit also declined to RM2.81 million from the preceding quarter’s RM9.02 million.
Sunsuria Executive Chairman Tan Sri Datuk Ter Leong Yap said the company registered better earnings last year since development projects such as Bell Suites (SoHo and retail), Monet Lily and The Olive achieved a higher percentage of work completion.
He revealed that the results included a gross profit and one-off revenue contribution of RM95.47 million and RM149.36 million respectively from its Jasper Square commercial development, which was completed in February 2019.
“While the outlook for the year remains challenging, we stand by our conviction that we will not compromise on our core values, and we believe this will pay off in the months and years to come,” said Ter as quoted by NST.