KUALA LUMPUR (Nov 23): S P Setia Bhd has reported that its net profit for the third quarter ended Sept 30, 2023 fell to RM51.8 million from RM70.19 million in the same quarter of 2022.

Revenue was, however, higher at RM1.08 billion versus RM861 million a year ago.

This brought its cumulative nine-month revenue to RM2.98 billion (RM2.75 billion in 2022), while cumulative net profit was RM150.3 million against RM217.8 million last year.

The company in a statement accompanying the release of its results said for the first nine months of this year sales hit RM3.89 billion — surpassing the RM2.7 billion it achieved in the same period last year, thanks to land sales and stronger demand for its property offerings.

It added that local projects contributed 87% or RM3.37 billion to its 9MFY2023 sales of RM3.89 billion; the remaining 13% or RM523 million came from international sales.

“The central region accounted for 54% of local sales, followed by the southern region with a 40% sales contribution. The group cleared completed inventories, with RM804 million sold during this period,” it said.

As of Sept 30, the group has secured RM450 million worth of bookings. It has 44 ongoing projects and unbilled sales of RM6.76 billion.

President and chief executive officer Datuk Choong Kai Wai said the group's sales performance and progress in expanding its presence locally and internationally has been possible due to the group's ability to anticipate market changes, continued brand loyalty among its customers as well as its commitment to quality.

"We remain optimistic about the future of the Malaysian property market and will continue to pursue growth opportunities both in Malaysia and overseas. We remain vigilant in managing our capital structure and effectively pursuing de-gearing initiatives, which will significantly improve our financial flexibility and contribute to our overall performance," Choong said.

S P Setia also announced it is selling a freehold plot in Setia City, Selangor, for RM228.8 million, cash.

It is selling the 17.99-acre plot to a subsidiary of KSL Holdings Bhd as part of its strategic plan to monetise some of its identified land banks, especially those not planned for immediate development. The sale is conditional upon KSL obtaining approval from the Economic Planning Unit for the transaction.

The sale, which is expected to bring the group an estimated gain of RM140.6 million, is also to expedite the development of Setia City into a fully integrated commercial hub and enhance the value of the township's remaining undeveloped lands, the group announced in a bourse filing accompanying the release of its quarterly financial performance. The sale is expected to be completed by the second quarter of next year.

It plans to use proceeds from the sale to fund new projects and reduce its debts. The group has been monetising its land bank to pare its debts and invest in new projects.

In June, it inked an agreement to sell 500 acres of freehold land in Semenyih, Selangor, to Mah Sing Group Bhd for RM392.04 million. A month later, it announced the disposal of 960 acres of prime freehold land in Tebrau, Johor, to Scientex Bhd for RM547.65 million.

KSL, meanwhile, said in a separate filing that the acquisition will enlarge its land bank to 2,600 acres. It plans to use the plot for a residential development with an estimated gross development value of RM2.2 billion. The project is expected to start in 2025 and is envisaged to spread over 10 to 15 years.

S P Setia shares, which have risen over 38% year-to-date, closed unchanged at 84.5 sen on Thursday, valuing the group at RM3.51 billion. KSL closed 3 sen lower at RM1.17, for a market capitalisation of RM1.21 billion.

Read also:
Mah Sing buys 500-acre Semenyih land from S P Setia for RM392m cash
Scientex inks new deal to buy Johor land from S P Setia, now for RM548 mil