S P Setia posts profit of RM119.68m for quarter ended Oct 31

KUALA LUMPUR (Dec 11): Property developer S P Setia Bhd posted a net profit of RM119.68 million in the three months period ended Oct 31, 2015, a decline of 8.9% from RM131.31 million a year ago, due mainly to higher selling and marketing expenses.

Thus, earnings per share fell to 4.58 sen from 5.19 sen, its filing with Bursa Malaysia yesterday showed. Revenue, however, was 14.7% higher at RM1.41 billion, from RM1.23 billion, on the back of increased revenue and profit recognition from the development of strong sales pipeline to date, and the timely staged handovers of the group’s Australian project, Fulton Lane.

For the 12 months period ended Oct 31, S P Setia’s net profit jumped 75% to RM709.98 million or 27.66 sen per share from RM405.68 million or 16.3 sen per share, as revenue rose 47.1% to RM5.61 billion from RM3.81 billion a year ago.

“Despite the challenging market, we have fared reasonably well. We have been strategic in our launches this year to suit market demand while continuing to deliver on our promises of quality, innovation and reliable products and services. We are confident the group is on track to achieve our RM4 billion sales target by December 2015,” said S P Setia acting president and chief executive officer Datuk Khor Chap Jen.

Total group sales for the 12 months period ended Oct 31 came in at RM3.45 billion; Malaysian projects contributed RM2.2 billion (64%) towards its total sales. Its sales for the fourth quarter alone stood at RM911 million, from which local projects contributed 83% or RM754 million.

The group will have two more months before ending its current financial year after changing its financial year end from Oct 31 to Dec 31.

S P Setia noted that the local property industry continues to face challenges due to current economic uncertainties, with a weaker ringgit, lower oil price, rising costs of living after the implementation of the goods and services tax, and tighter lending from banks. All these have contributed to the overall weak market sentiments, the property developer said.

Nevertheless, with unbilled sales of RM9.5 billion, S P Setia is confident that with the group’s strong brand name, established townships and right product strategies, it will continue to perform well in the remaining two months of the financial period.

S P Setia closed three sen or 0.96% lower at RM3.10 yesterday, for a market capitalisation of RM8.15 billion.

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This article first appeared in The Edge Financial Daily, on Dec 11, 2015. Subscribe to The Edge Financial Daily here.