SP Setia targets RM5.65bil sales in 2019

KUALA LUMPUR: Property developer SP Setia Bhd is targeting a 10% year-on-year growth in sales to RM5.65bil for 2019, despite the challenging property market currently. 

President and CEO Datuk Khor Chap Jen said there is still demand for properties in spite of the sluggish property segment currently. 

“We believe that the market has bottomed out and fewer people are adopting a wait-and-see approach,” he said at a briefing on the company’s 2018 financial results today. 

Khor said the company will be launching RM6.8bil worth of properties this year, the bulk of which will comprise local projects. 

“We are also hopeful the government will relax the lending guidelines,” he added. 

SP Setia achieved sales of RM5.12bil last year, surpassing its target of RM5bil for 2018.

The company’s local projects contributed RM4.12bil or approximately 80% of sales while the international projects contributed RM1bil or approximately 20% of sales.

For 2019, the company plans to launch RM6.80bil worth of properties, comprising RM6.66bil from local launches while international launches comprised of new phases in Eco Lakes and Eco Xuan in Vietnam amounting to RM139mil.

“Underpinned by an unbilled sales pipeline of RM12.32bil, 45 ongoing projects and effective remaining land banks of 9,516 acres with a gross development value of RM149.70bil as at Dec 31, 2018, the Group is expected to perform resiliently against prevailing market challenges and the prospects going forward remain positive,” it said in a statement.

SP Setia Bhd’s net profit for its fourth quarter ended Dec 31, 2018 dropped to RM101.55mil compared with RM276.03mil in the previous corresponding period, partly due to higher volume of development phases completed and handed over in the last quarter of 2017.

Revenue in the fourth quarter fell to RM1.02bil from RM1.33bil a year earlier.

In a filing with Bursa Malaysia today, the company said its fourth quarter 2017 results benefited from the profit recognition on the completion of Phase 1 of its Battersea Power Station.

SP Setia said projects in the United Kingdom 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.

For its financial year ended Dec 31, 2018, SP Setia’s net profit plunged to RM670.96mil from RM993.70mil in the previous corresponding period, while revenue fell to RM3.59bil from RM4.29bil a year earlier.