SP Setia 1Q net profit up 5% on support from Battersea sales

by **Cals** Thu 12 Mar 2015, 01:04

SP Setia 1Q net profit up 5% on support from Battersea sales

By Ahmad Naqib Idris Adzman Shah / theedgemarkets.com | March 11, 2015 : 7:01 PM MYT

KUALA LUMPUR (Mar 11): [size=14]SP Setia Bhd ([You must be registered and logged in to see this image.] Financial Dashboard), the country’s largest property developer by sales, saw its net profit climbed 5% to RM101.31 million or 3.99 sen per share for the first financial quarter ended Jan 31, 2015 (1QFY15) from RM96.78 million or 3.94 sen per share a year ago, supported by the recognition of RM658 million in sales from the global launch of Battersea Power Station Phase 3A in London.

Revenue for 1QFY15 jumped 28% to RM926.01 million from RM721.56 million in 1QFY14, mainly due to higher revenue recognition from its property development segment.

In its filing with Bursa Malaysia today, SP Setia (fundamental: 1.4; valuation: 1.2) said ongoing projects that contributed to its profit and revenue for the quarter included Setia Alam and Setia EcoPark in Shah Alam; Setia EcoHill in Semenyih; Setia Eco Glades in Cyberjaya; Setia Sky Residences at Jalan Tun Razak; and KL Eco City at Jalan Bangsar.

Meanwhile, its construction division’s revenue for 1QFY15 was mainly contributed by the construction of a concession asset in Penang, Jabatan Keretapi Negeri Sabah building in Sabah, and the Kompleks Institut Penyelidikan Kesihatan Bersepadu in Setia Alam.

“As such, the construction profit to be recognised on these projects will not be significant as the group expects to derive most of the benefits from subsequent development activities to be undertaken in the respective states,” said SP Setia.

For the balance of the financial year ending Oct 31, 2015 (FY15), the group expects to do well, backed by its high unbilled sales of RM11.5 billion as of Feb 28, 2015.

It recorded sales of RM1.2 billion for the period between November 2014 and February 2015.

“For this financial year, we will be focusing on the delivery of our projects and launches of mid-range homes to meet the current demand,” said SP Setia acting president and chief executive officer Datuk Khor Chap Jen in a statement today.

He said demand was strong for SP Setia’s mid-priced range products in the Klang Valley, based on the strong bookings from the group’s recent launches of Caffra and Serrata at Setia Alam’s Precinct 11, which saw 100% and 95% take up rates respectively on their first day of launch.

“We are confident that with the right products and the strategic location of our remaining landbank, we will continue to witness strong demand for our projects in the current financial year,” said Khor.

SP Setia shares fell 3 sen or 0.9% to RM3.37 today, bringing its market capitalisation to RM8.64 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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