SP Setia’s Q4 earnings fall 63.21%

PETALING JAYA: SP Setia Bhd’s net profit for the fourth quarter ended Dec 31, 2018 (Q4 FY18) fell 63.21% to RM101.55 million from RM276.03 million a year ago while revenue fell 23.41% to RM1.02 billion from RM1.33 billion a year ago.

In a filing with Bursa , the group said that the lower profit and revenue was due to higher volume of development phases completed and handed over in Q4 FY17 as well as profit recognition on the completion of Phase 1 of Battersea Power Station.

“Projects in the UK and Australia have to adhere to the completion method of accounting for revenue recognition, hence the completion of such projects will normally have material upside impact on the group’s profit,” it said.

For the ended Dec 31, 2018 (FY18), net profit fell 32.48% to RM670.96 million from RM993.70 million a year ago while revenue fell 16.19% to RM3.59 billion from RM4.29 billion a year ago.

Despite the lower profit and revenue, the group declared a final dividend of 4.55 sen per share, bringing the total dividend payout to 8.55 sen, representing a payout ratio of 70.1% for FY18.

In respect to the Islamic Redeemable Convertible Preference Shares A and Islamic Redeemable Convertible Preference Shares B, the group also declared a preferential dividend of 6.49% per annum and 5.93% per annum respectively for the financial period from July 1, 2018 till Dec 31, 2018.

In FY18, SP Setia achieved RM5.12 billion sales, surpassing its target of RM5 billion. Local projects contributed RM4.12 billion or 80% of sales while international projects contributed RM1 billion or 20% of sales.

In terms of local projects, sales secured were largely from the central region with RM3.11 billion while the southern region contributed RM805.1 million. The northern and eastern regions contributed a combined RM206.6 million of sales.

In terms of international projects, UNO Melbourne contributed RM653.6 million of sales while Sapphire by the Gardens contributed RM65.5 million of sales.

On Dec 14, 2018, the group achieved a significant milestone with Battersea Phase 2 Holding Company Limited signing a sale and purchase agreement with PNB-Kwasa International 2 Limited (JVCo), a company formed by Permodalan Nasional Bhd (PNB) and the Employees Provident Fund Board (EPF) to undertake the acquisition of the commercial assets in Phase 2 of Battersea Power Station development for a base consideration of £1.58 billion (about RM8.33 billion).

As SP Setia owns 40% stake in Battersea Phase 2 Holding Company Limited, it will be able to recognise £630 million (RM3.33 billion) sales from this transaction. If this sale is taken into consideration, it would bump up SP Setia’s total sales to RM8.45 billion for FY18.

For FY19, the group plans to launch RM6.80 billion worth of properties, comprising RM6.66 billion local launches including new projects from I&P land banks, and new phases in Eco Lakes and Eco Xuan in amounting to RM139 million.

The group has set a of RM5.65 billion for FY19, of which it expects 89% to be derived from local projects. As at Dec 31, 2018, it has unbilled sales of RM12.32 billion, 45 ongoing projects and effective remaining land banks of 9,516 acres with a gross development value of RM149.70 billion.

Source: The Sun Daily

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