Dear Stakeholders,
A Moment of Reflection, A Call to Action
As we close out another year in our journey, I wish to begin by expressing my sincere gratitude to our former CEO, Encik Sufian Abdullah and former Board members Mr. Poh Ying Loo and Mr. Alex Yeow Wai Siaw, who have played an instrumental role in steering UEM Sunrise through the uncertainties of the post-pandemic era and back to profitability.
This marks my second message to you as Chairman. In last year's statement, I outlined a three-year plan aimed at strengthening the fundamentals of our organisation. With the global landscape evolving at breakneck speed, the urgency to accelerate our transformation has never been more critical. What we do next and how quickly we do it will determine whether we capture the opportunities before us or fall short of our potential.
A Year of Progress: Better, but Not There Yet
The year 2024 saw encouraging improvements in our financial performance. Profit After Tax and Non-Controlling Interests (PATANCI) rose 38%, while unbilled sales grew 15% year-on-year to RM3.0 billion, providing a healthy earnings base for the next two to three years. These results were supported by successful land monetisation activities, especially in Johor and by improving sentiment in the domestic market.
However, we must confront the fact that approximately 24% of this year's results was driven by non-operating activities such as land monetisation rather than by our core operations. While these transactions are part of the playbook of any property company, they do not provide the sustainable base required in an increasingly competitive and volatile world. At the same time, our FY2024 Return on Equity (ROE) of 1.5% remains below our peer average of between 5% and 6%.
Our strategically located landbanks, combined with the current momentum in policy and market sentiment, particularly in Johor, provide a significant advantage. However, these advantages are not infinite. If not activated decisively and backed by strong operational performance, they could be depleted without delivering lasting value. We must ask ourselves: Are we moving fast enough? Are we fully capitalising on the structural tailwinds to propel us forward? While progress has been made, the time to accelerate is now.
Disorder as the New Normal: A Shifting Global Landscape
There has been a significant compression of market cycles in the past five years, as we live through a level of disruption that previously might have played out over decades. We experienced the collapse of global demand during the COVID-19 pandemic in 2020, followed by a historic wave of inflation and monetary tightening in 2022. Just as economies began to stabilise, the world was thrust into another realignment, with artificial intelligence (AI) driving exponential demand for compute infrastructure. Now, with the return of Trump-era protectionism and rising geopolitical tensions, the global economic order is once again fragmenting.
The rapid adoption of AI, in particular, has ushered in what some are calling a modern-day infrastructure gold rush. Investment into digital infrastructure, especially data centres, has soared and Johor has emerged as a regional hub for these developments. UEM Sunrise is already participating in this space, hosting several data centre campuses across our landbank, with further construction ongoing and MoUs signed for future works. While this positions us well in the short to medium term, we must also be cautious. Technological leaps often come with unpredictability. As AI models such as DeepSeek become more energy- and compute-efficient, long-term demand projections for physical infrastructure may moderate. We cannot afford to assume that today's demand will automatically sustain tomorrow.
This is no longer a world of orderly, predictable market cycles. It is a world defined by velocity, volatility and the need for constant recalibration. Our strategy and culture must evolve to reflect this. There is no point trying to predict the unpredictable.
