S P Setia 2Q net profit up 8%, secured sales of RM2.07 bil in 1HFY17

KUALA LUMPUR (Aug 17): Property developer S P Setia Bhd posted a net profit of RM136.32 million for the second financial quarter ended June 30, 2017 (2QFY17), increased 8.38% from RM125.78 million in 2QFY16, despite lower revenue.

In the filling with Bursa Malaysia today, S P Setia attributed the increase in earnings on higher units of residential properties being completed and handed over for Battersea Power Station Phase 1, as compared with lesser units completed in the preceding quarter.

However, S P Setia’s quarterly revenue dropped 21.57% to RM794.71 million, from RM1.01 billion, due to lower income from its property development, construction and other operations.

S P Setia's board of directors recommended an interim dividend of 4 sen per share, in respect of the financial year ending Dec 31, 2017 (FY17).

For the first half of FY17 (1HFY17), S P Setia net profit fell 3.08% to RM241.5 million, from RM249.17 million a year ago. Revenue dropped 9.72% to RM1.73 million, from RM1.92 million in 1HFY16.

Revenue from property development activities is lower by 23%, mainly due to completion of several phases in KL Eco City at Jalan Bangsar and the completion of the entire Eco Sanctuary in Singapore end of last year.

Meanwhile, the construction profit for the projects — Subterranean Penang International Convention & Exhibition Centre (SPICE) at Penang, Kompleks Institut Penyelidikan Kesihatan Bersepadu (1NIH Complex) at Setia Alam and commuter station at KL Eco City is not significant to the group, as they are carried out as part of a land and development right exchange arrangement.

For 1HFY17, S P Setia said the group has achieved sales of RM2.07 billion, of which local sales contributed 51.9% or RM1.08 billion to total sales, while the remaining 48.1% or RM996.5 million were generated from international projects.

S P Setia said its secured property sales were driven by its property projects in the central region which generated RM797.3 million, whereas the Southern and Northern regions contributed combined sales of RM278.9 million.

“The sales achieved reflect an increased demand for the group’s projects in the second quarter of FY2017. This is encouraging, as it validates the strategy we have adopted,” said S P Setia’s president and chief executive officer Datuk Khor Chap Jen.

On its prospects, the group will focus more on the local market, with emphasis given to launches of mid-range landed properties in the Klang Valley.

The strategy is to launch more of the landed properties in the group’s flagship townships, whereby the underlying demand for such properties by owner occupiers are still strong.

“We will launch properties with a combined GDV of RM2.94 billion and the notable projects among others are Setia Alam, Setia EcoHill, Setia EcoHill 2, Setia Eco Templer, Setia Eco Glades, KL Eco City and Setia Sky Seputeh (Tower B),” Khor said.

At midday break today, S P Setia shares remain unchanged at RM3.31, with 611,300 shares traded for a market capitalisation of RM9.89 billion. — theedgemarkets.com

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