S P Setia optimistic of achieving RM4 bil sales this year despite lower 1Q net profit

KUALA LUMPUR (May 11): S P Setia Bhd, which is controlled by Permodalan Nasional Bhd, saw its net profit for the first quarter ended March 31, 2017 (1QFY17) drop 14.8% to RM105.18 million from RM123.39 million a year ago, despite higher revenue.

In its filing with Bursa Malaysia this evening, S P Setia attributed the drop in earnings to lower other income generated from its wood-based manufacturing, trading activities, and the operation of retail mall and Setia City Convention Centre, which saw a significant 45.2% drop to RM37.68 million from RM68.76 million a year ago.

However, S P Setia’s quarterly revenue grew 3.5% to RM940.19 million from RM908.46 million, thanks to higher income from its property development and construction businesses which grew 0.4% and 58.8% respectively.
 
S P Setia also said that it secured property sales of RM426.8 million, of which local sales contributed 82% or RM351.4 million to total sales, while the remaining 18% or RM75.4 million were generated from international projects.

S P Setia said its property sales secured were driven by its property projects in the central region which generated RM249.7 million, whereas the Southern and Northern regions contributed RM101.7 million.

“The sales achieved were within expectations, which is consistent with the lower sales typically experienced during the Chinese New Year period and the shorter month of February,” said S P Setia’s president and chief executive officer Datuk Khor Chap Jen.

According to him, the company had secured property sales of RM801 million between January and April this year,.

In 1QFY17, S P Setia said it launched 2,587 units of properties with a gross development value (GDV) of RM571 million.

The company also saw its latest project — TRIO by Setia in Bukit Tinggi, Klang — enjoying a commendable take-up rate of 60% since its launch on April 8, indicating that underlying demand is strong for transit-oriented development.

“We are confident that the market will be pleased with our upcoming launches as we have meticulously crafted offers to suit the needs of today’s property buyers. Designs and functionality of our properties offered have to be relevant to the needs of our discerning buyers and that’s where Setia will continue to innovate and provide the best possible value-for-money offerings,” Khor added.

On its prospects, S P Setia said it will “remain positive” with total unbilled sales of RM7.84 billion, anchored by 30 ongoing projects in the country and abroad, together with remaining landbank of 5,141 acres with a potential GDV of RM75.72 billion as at end-March 2017.

“We are optimistic of meeting the sales target of RM4 billion for the current financial year,” S P Setia added.

Shares of the Main Market-listed S P Setia closed one sen or 0.27% lower at RM3.68 today, giving it a market capitalisation of RM10.5 billion. — theedgemarkets.com

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