SP Setia’s 4Q earnings down 27%, declares one sen dividend

By FARA AISYAH / Graphic By TMR

SP SETIA Bhd’s net profit declined 26.8% year-on-year (YoY) to RM70.13 million in the fourth quarter ended Dec 31, 2019 (4Q19), from RM95.85 million a year ago on lower profit contribution from its property development segment.

Earnings per share for the three months was, however, higher at 1.73 sen against 0.72 sen in 4Q18.

Quarterly revenue decreased 21.6% YoY to RM796.17 million from RM1.02 billion the previous year.

“Both revenue and profit before tax for the current quarter is lower than the corresponding quarter in the financial year ended Dec 31, 2018 (FY18) partly due to higher volume of development phases completed and handed over in the last quarter of FY18,” the group told Bursa Malaysia yesterday.

It declared a dividend of one sen, payable at a date to be determined later. In respect of the Islamic redeemable convertible preference shares A and Islamic redeemable convertible prefe-rence shares B, the company also declared a preferential dividend of 6.49% per annum and 5.93% per annum respectively for the financial period from July 1, 2019, till Dec 31, 2019.

For FY19, the developer’s net profit fell 48.3% YoY to RM343.72 million, while revenue dropped 9.5% YoY to RM3.93 billion.

Sales for the year came in at RM4.56 billion, within the revised RM4.55 billion sales target.

Local projects remained the foremost contributor, providing RM4.01 billion or 88% of group sales, while the remaining RM543 million or 12% were filled by international projects such as UNO Melbourne in Australia, Daintree Residence in Singapore and Eco-Xuan in Vietnam.

Domestic sales came largely from the central region at RM2.78 billion, aided by a RM747 million contribution from the southern region and another RM480 million from the northern region.

SP Setia said it witnessed its strongest period in 4Q19 with a spike in sales of RM1.49 billion due to eleventh-hour purchases by home buyers taking opportunity of the incentives offered under the Home Ownership Campaign (HOC).

Some RM675 million sales from the HOC were secured during 4Q19, while total sales for the year brought in by the HOC amounted to RM1.82 billion.

In FY20, the developer targets to launch landed residential pro-ducts which are in line with the demand of owner-occupiers, especially in township developments such as Setia Alam in Shah Alam, Setia Ecohill 1 & 2 in Semenyih, Setia Alamsari in Kajang, and Bandar Kinrara in Puchong, among others.

It will also launch commercial products such as shop lots with a combined gross development value (GDV) of approximately RM871 million in Alam Impian in Shah Alam, Kota Bayuemas in Klang, Temasya Glenmarie in Shah Alam, Setia Eco Glades in Cyverjaya and Taman Pelangi in Johor Baru.

The group is maintaining a sales target of RM4.55 billion for FY20, and will closely monitor the global outbreak of the coronavirus outbreak and its impact on the economic outlook.

“Underpinned by an unbilled sales pipeline of RM10.67 billion, 48 ongoing projects and an effective remaining land banks of 8,858 acres (3.584ha) with a GDV of RM141.84 billion as at FY19, the group is expected to remain resilient against prevailing market challenges,” it stated.