UEM Sunrise Bhd could cut up to 10 per cent of its workforce in a move to trim cost and operating expenses amid weak market conditions, said sources.
The company may offer a mutual separation scheme (MSS) to employees early next year.
“The MSS will be announced at a town hall meeting, most likely in the current quarter. It follows UEM Group Bhd, which is expected to offer MSS to its employees in November,” said a source.
UEM Sunrise, which is 66.06 per cent indirectly-owned by Khazanah Nasional Bhd, employs about 1,500 people.
UEM Sunrise managing director and chief executive officer Anwar Syahrin Abdul Ajib did not confirm or deny that the company would be offering the MSS.
He said in an email UEM Sunrise had been revising its cost base, which included projects, operations and overheads. The move resulted in RM68 million savings last year.
“We will continue to focus on optimising our cost base to ensure cost-efficiencies as well as build encouraging operational and financial performance in order to drive further efficiencies across the business.”
As at December 31 last year, UEM Sunrise’s borrowings and gearing ratio stood at RM4.7 billion and 0.66 times, respectively.
In its 2018 annual report, UEM Sunrise s aid it would continue to consolidate its cash through the asset divestment strategy.
This included identifying non-strategic land and assets for disposal to raise funds.
The New Straits Times reported in February UEM Sunrise might sell Hyatt House Kuala Lumpur in Mont’ Kiara, which was neither a strategic asset nor a core business. A company spokesman did not rule out the possibility that it would sell the hotel.
According to the annual report, UEM Sunrise has a large developable land bank of about 5,261ha, with 76 per cent of it in the southern region, particularly Johor.
Last year, the company disposed of non-strategic land to Country View Bhd and Kimlun Corp Bhd for a total of RM457.4 million. It has identified a few parcels of land for disposal this year worth close to RM300 million.
Meanwhile, UEM Sunrise is launching RM1.4 billion worth of projects this year and targeting RM1.2 billion in sales, compared with RM1.43 billion achieved last year.
Its completed inventories, mostly in Johor, have exceeded 3,000 units and could be worth more than RM1.5 billion.
Anwar said the completed inventories were lower than what the company had at the beginning of the year. He did not disclose any figures.
“We will continue to reduce (our inventories) towards year-end. This is evident from our successful sales campaigns, in line with the Home Ownership Campaign. We are pleased that the campaign has been extended to December 31.”
Although the property sector remains challenging in the short to medium term, UEM Sunrise is confident of meeting its sales target this year.
“We see opportunities and will continue to offer unique brand value propositions, and will be more cautious about product launches,” he said.