SP Setia confident of RM3.8b sales target during incentive period

The company says many potential homebuyers remain on the hunt for a bargain to take advantage of incentives under the current market


SP SETIA Bhd is confident of achieving its full-year sales target of RM3.8 billion backed by an uptick in buying interests from the home ownership campaign (HOC), as the company reported a wider net loss in the third quarter (3Q).

The company registered a net loss of RM263.43 million in its 3Q ended Sept 30, 2020 (3Q20), due to its share of impairment of RM336.3 million from the group’s 40%-owned UK joint-venture company, Battersea Project Holding Co Ltd. Excluding the impairment, SP Setia would have made a profit before tax of RM117.2 million in 3Q20.

Revenue for the quarter surged RM1.08 billion from RM331.3 million in the preceding quarter due to better local sales after strict restrictions on movement in March were lifted. Year-on-year, turnover rose 15.8% from RM932.07 million.

In a filing to Bursa Malaysia last Friday, the company stated that many potential homebuyers remain on the hunt for a bargain to take advantage of incentives under the current buyer’s market.

“We are heartened that as of Oct 31, 2020, our sales and secured bookings stood at RM2.86 billion and RM1.67 billion respectively. We noted that many potential buyers realised the importance of owning a home that complements their lifestyle and needs under the new norm.

“Our key focus for the next two months would be on the swift conversion of these bookings into sales, and hence, we believe we have a fair chance to achieve our sales target of RM3.8 billion set for this financial year,” SP Setia president and CEO Datuk Khor Chap Jen said in a statement.

He further noted that the company has unbilled sales worth RM9.82 billion in place that is expected to sustain the group for the next two years.

Khor added that the 125 basis points cut in the Overnight Policy Rate (OPR) in 2020 had provided the support needed to the housing demand, particularly in the primary market, as evidenced by a relatively stronger recovery in the growth of loan applications for the purchase of residential properties which are mainly owner-occupied and under the affordable segment.

The group secured total sales of RM2.26 billion in the first nine months with local projects contributing approximately 82% or RM1.85 billion of the full figure.

The remaining 18% or RM410 million were contributed mainly by its international projects such as UNO Melbourne, Sapphire by the Gardens and Marque Residences in Australia, as well as Daintree Residence in Singapore.

On the local front, sales were mainly from the central region with RM1.36 billion, aided by RM306 million contribution from the southern region, while the northern region contributed another RM160 million.

The total sales secured were also complemented by the concerted effort in clearing comple-ted inventories as RM462 million worth of completed inventories were monetised during the period.

The company’s share price ended one sen or 1.38% lower last Friday to close at 71.5 sen, giving it a market valuation of RM2.9 billion.