Gold Coast developer
Sunland Group has shocked the market by announcing a first-half profit of $185,000, well below the unaudited forecast of $1.0 million only one month ago and significantly below the $7.8 million profit a year earlier.
With over $130 million in settlements expected in the current half, the company still remains confident of delivering an annual profit of between $14 - $15 million this financial year.
Revenue for the period fell 25% to $78.8 million.
Managing Director
Sahba Abedian
described current conditions as “challenging” with market conditions across Australia remaining “very weak and volatile”.
“There is definitely a continued pricing moderation taking hold across the eastern seaboard of Australia”.
Mr Abedian reaffirmed Sunland’s strategy of delivering affordable house and land packages until market conditions improved.
Sunland’s current residential pipeline totalled over 3,600 lots worth $1.6 billion.
Revenue from Palazzo Versace Gold Coast lifted 54% to $11.8 million after securing full control of the flagship hotel in an asset swap with some of its Dubai properties in 2011.
The company’s scaling back of Middle Eastern operations resulted in an 85% reduction in project management revenue from $16.8 million to $2.5 million.
Despite the mixed results, analysts maintain that Sunland remains in strong financial shape with $54.6 million of debt against $65.9 million of undrawn credit lines and $19.2 million in free cash. No dividends were announced.
