By SHAHEERA AZnAM SHAH / Pic By ISMAIL CHE RUS

Sp Setia Bhd posted a higher net profit for the second quarter ended June 30, 2018 (2Q18), as a result of its encouraging earnings from property development activities.

In an exchange filing to Bursa Malaysia yesterday, SP Setia stated that its net profit jumped 76.7% year-on-year (YoY) to RM442.7 million in 2Q18 from RM250.56 million.

Its revenue rose 6.8% to RM925.97 million from RM886.35 million a year ago.

In 2Q18, SP Setia operational revenue for property development grew 15% to RM869.3 million from RM757.3 million, while the profit before tax (PBT) grew twofold to RM544.4 million from RM211.9 million.

“During the quarter, there was RM343.8 million of one-off provisional fair value gain arising from the re-measurement of existing equity stake in Setia Federal Hill Sdn Bhd, which was previously a joint venture and now a wholly owned subsidiary of the group,” the filing read.

The property developer’s revenue for the construction segment fell 73.9% to RM14.8 million from RM57 million a year ago which was mainly derived from the ready-mix concrete and constructions for two projects in Setia Alam, Shah Alam, and KL Eco City in Bangsar.

“The construction profits from the Kompleks Institut Penyelidikan Kesihatan Bersepadu project in Setia Alam and the commuter station project in KL Eco City are not significant as they are carried out as part of land and development right exchange arrangement,” it said.

It declared an interim dividend of four sen per share, of which the payable date has yet to be determined.

Its president and CEO Datuk Khor Chap Jen (picture) said the property developer’s encouraging performance is a testament to the strategies applied towards achieving a higher sales target.

“The group has performed reasonably well for 2018 so far given the current lacklustre environment and this is a testament to the strategies that we have adopted and the resilience of Team Setia in ensuring that we work towards achieving our RM5 billion sales target this year,” he said in a statement.

SP Setia said its ongoing integration with I&P Group is making progress, particularly on the landbank development as prominence is placed for both townships and mixed-use developments.

For the second half of the year, SP Setia said its property launches will be slanted towards the local market, while emphasising on the mid-range landed properties in the Klang Valley.

“For example, the planned major launches are currently located in Setia Alam, Setia Ecohill, Setia Ecohill 2 and others, which amounted to a combined gross development value (GDV) of RM2.23 billion,” it said.

For the remaining of 2018, SP Setia expects the local property market to remain subdued as the public adopts a “wait and see” approach in seeking a clearer direction from the authorities on housing policy matters.

“Post-general election, the overall sentiment has improved. However, a clearer direction is awaited on the anticipated changes to the housing policy.

“SP Setia’s prospects going forward will remain positive due to the planned pipeline of launches, the sustained momentum and the strong sales achieved to date,” it said.

Its total unbilled sales currently stand at RM8.12 billion, weighed by 46 ongoing projects. As at June 30, its unutilised landbank stood at 9,587 acres (3,879.72ha) with a potential GDV of RM155.94 billion.