What a quarter it’s been for Sunway Berhad! The diversified Malaysian conglomerate has just released its unaudited consolidated results for the first quarter ended 31 March 2025, and the report paints a picture of robust growth in revenue and profit. Despite facing a dynamic market landscape and some specific segmental challenges, Sunway has demonstrated impressive resilience and strategic execution. This report highlights key financial achievements and provides a glimpse into the strategic initiatives driving the Group’s future.
Let’s dive into the numbers and see what’s driving Sunway’s performance.
Core Data Highlights: A Strong Start to 2025
Sunway Berhad delivered a strong performance in the first quarter of 2025, showcasing significant year-on-year growth across its key financial metrics. This reflects the Group’s ability to capitalize on various market opportunities and maintain operational efficiency.
Q1 2025
- Revenue: RM2,367.0 million
- Profit Before Tax: RM304.1 million
- Profit for the Period: RM236.6 million
- Profit Attributable to Owners of the Parent: RM190.6 million
- Basic Earnings Per Share: 2.67 sen
Q1 2024
- Revenue: RM1,419.0 million
- Profit Before Tax: RM226.7 million
- Profit for the Period: RM190.9 million
- Profit Attributable to Owners of the Parent: RM172.2 million
- Basic Earnings Per Share: 2.27 sen
Comparing the current quarter (Q1 2025) with the corresponding quarter of the previous financial year (Q1 2024):
- Revenue soared by
67%
to RM2,367.0 million, primarily driven by higher contributions from most business segments, particularly the construction sector.
- Profit Before Tax (PBT) increased by
34%
to RM304.1 million, benefiting from the strong revenue growth despite some segments experiencing lower profit contributions.
- Profit for the Period saw a healthy rise of
24%
to RM236.6 million.
- Profit Attributable to Owners of the Parent grew by
11%
to RM190.6 million.
- Basic Earnings Per Share (EPS) improved by
18%
, reaching 2.67 sen.
This impressive growth highlights the Group’s diversified portfolio and its ability to leverage opportunities across various sectors.
Segmental Performance: A Closer Look
Sunway’s diverse business segments showed varied but overall positive performance in Q1 2025 compared to Q1 2024:
- Property Development: Revenue decreased by 8.5% and PBT by 14.0% due to lower progress billings from local and overseas development projects. It’s worth noting that profits from one ongoing Singapore project will only be recognized upon completion and handover, impacting current quarter figures.
- Property Investment: This segment saw a 6.6% increase in revenue and a significant 33.0% jump in PBT. This was attributed to stronger performance across most sub-segments, including higher revenue from property investment assets, robust leisure business operations, and a larger contribution from its associate company, Sunway REIT.
- Construction: A standout performer, this segment recorded a remarkable 232.4% increase in revenue and a 170.4% surge in PBT. This substantial growth was primarily driven by the accelerated progress of data centre projects.
- Healthcare: The healthcare segment’s share of net profit decreased by 13.6%. This decline was mainly due to start-up operational losses from the newly opened Sunway Medical Centre (SMC) Damansara and pre-commencement costs from SMC Ipoh. However, excluding these new facility costs, existing SMCs in Sunway City, Velocity, and Penang delivered improved operational results due to higher patient numbers and additional licensed beds.
- Trading and Manufacturing: This segment reported a 21.3% increase in revenue and a 54.6% increase in PBT, driven by higher domestic sales.
- Quarry: Revenue for the quarry segment rose by 7.1% and PBT by 1.6%, mainly due to higher sales volume and average selling prices of aggregates.
- Others: Revenue increased by 18.1%, primarily from the building materials segment. However, PBT decreased significantly by 64.0% due to higher operating expenses and lower contributions from other sub-segments.
Financial Health: Balance Sheet and Cash Flow
As at 31 March 2025, Sunway’s financial position remained robust. Total assets stood at RM32.21 billion, up from RM31.52 billion at the end of 2024, reflecting continued investment and growth. Total equity also increased to RM16.16 billion from RM15.94 billion, reinforcing the Group’s strong capital base.
Key Financial Position Highlights:
| Metric | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 32,211,100 | 31,517,836 |
| Total Equity | 16,157,439 | 15,938,455 |
| Total Liabilities | 16,053,661 | 15,579,381 |
Cash flow from operating activities saw a substantial increase, generating RM631.1 million in Q1 2025, a significant improvement from RM45.4 million in Q1 2024. This strong operational cash generation underscores the Group’s healthy core business performance. However, net cash used in investing activities increased considerably to RM585.8 million, indicating significant investments in assets and strategic initiatives. Net cash generated from financing activities decreased to RM245.0 million.
Borrowings Overview:
Total borrowings for the Group increased by approximately RM0.98 billion, from RM10.28 billion as at 31 March 2024 to RM11.26 billion as at 31 March 2025. The weighted average interest rate on these borrowings is 4.34%. A significant portion of the Group’s borrowings, 41%, are fixed-rate instruments, providing stability against interest rate fluctuations, while the remaining 59% are floating-rate instruments. Approximately RM3.60 billion of the total borrowings are denominated in foreign currencies, with the Group utilizing cross-currency swap contracts to manage foreign currency risk.
Risks and Prospects: Navigating the Future
Sunway Berhad remains optimistic about its prospects, underpinned by strategic initiatives and a resilient Malaysian economy, though it acknowledges potential headwinds.
Market Outlook and Opportunities:
- The Malaysian economy showed sustained domestic demand and investment activities in Q1 2025, although global policy uncertainties might lead to a slightly moderated growth forecast for 2025.
- The property market in Malaysia and Singapore continues to hold a positive outlook, with Johor emerging as a key hub for industrial and data centre investments. Sunway’s strategic partnership with MRT Corporation for a RM2.6 billion integrated transit-oriented development (TOD) in Johor Bahru is a significant game-changer, aiming to accelerate developments in Sunway City Iskandar Puteri.
- The construction industry is expected to expand further, driven by public and private investments in infrastructure and advanced technology facilities. Sunway’s construction segment is focusing on data centre projects and has a strong outstanding order book of RM6.6 billion, with RM2.2 billion in new orders secured to date.
- Robust investments also present a positive outlook for the Group’s building materials, quarry, and trading & manufacturing segments due to increased demand from the ongoing construction upcycle.
- The healthcare segment continues its expansion, with the successful launch of Sunway Medical Centre Ipoh in April 2025, bringing the total licensed beds to 1,647. A new partnership for a 300-bed medical centre in Putrajaya will further expand future capacity to over 3,000 beds. The preparation for Sunway Healthcare Group’s initial public offering (IPO) is also in progress.
Potential Risks:
- Geoeconomic Uncertainties: Rising global geoeconomic uncertainties pose a risk to global economic growth. While Sunway’s operations are primarily concentrated in Malaysia, indirect impacts from global trade tensions remain a concern.
- Litigation: The Group is involved in several material litigations, including:
- An arbitration case involving its construction arm, SunCon, in India, with an arbitral award being appealed.
- A significant lawsuit against SunCon regarding alleged trespass and encroachment related to an LRT project, with claims amounting to hundreds of millions. SunCon is disputing the claim and has involved a third party for indemnity.
- Litigation involving Sunway REIT and Metroplex concerning the conversion of chattels, where damages have been assessed, and appeals have been filed by both parties. While Sunway REIT has remitted the assessed amount, the Group remains exposed to a proportionate share of contingent liability.
The Board is confident in cautiously navigating these headwinds and expects the Group’s performance for the year to remain strong.
Summary and
Sunway Berhad’s Q1 2025 results demonstrate a powerful start to the financial year, with significant growth in revenue and profit driven by its diversified business segments, particularly the stellar performance of its construction division. The strategic focus on high-growth areas like data centres and healthcare expansion, coupled with continued development in key property markets, positions the Group for sustained growth. While global uncertainties and ongoing litigations present potential challenges, Sunway’s proactive strategies, strong balance sheet, and robust operational cash flow provide a solid foundation. The commitment to expanding its healthcare network and leveraging opportunities in the burgeoning Johor region are clear indicators of its forward-looking approach.
Key points from the report that highlight potential risks include:
- Exposure to indirect impacts from global trade tensions due to rising geoeconomic uncertainties.
- Ongoing material litigations involving its construction and property investment arms, which could entail financial implications depending on the outcomes.
- Start-up operational losses and pre-commencement costs from newly opened healthcare facilities, which may impact the segment’s profitability in the short term, despite long-term growth prospects.
Overall, Sunway Berhad appears to be on a strong trajectory, leveraging its core strengths and strategic investments to drive future growth.
Final Thoughts
Sunway Berhad’s latest quarterly report showcases a company that is not just growing, but strategically evolving to capture new opportunities in a dynamic environment. The impressive revenue and profit growth, especially from the construction sector, alongside the ambitious expansion plans for healthcare and property development, paint a promising picture. The Group’s prudent financial management, as seen in its borrowing structure and cash flow generation, provides a solid base for future endeavors.
Do you think Sunway Berhad can maintain this growth momentum throughout the year, especially with its significant investments in data centers and healthcare? Share your thoughts in the comments below!
