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Logistics, e-commerce, healthcare among areas for S P Setia’s potential business diversification

KUALA LUMPUR (March 24): Property developer S P Setia Bhd said it had identified several potential areas for business diversification, according to the group’s 2020 Annual Report released today.

It said logistics, e-commerce, healthcare and assisted senior living are among the markets to be explored by the group.

This is among the key areas to build S P Setia’s business in a profitable yet sustainable manner, noted the group.

S P Setia said it is constantly on the lookout for partners who are able to offer different areas of expertise that would complement and unlock the value of its landbank.

“We seek to strategically expand our investment properties portfolio as a means of business diversification and to secure steady revenue streams,” it said.

Moreover, it seeks to reduce its gearing and maintain the optimal structure by continuously reviewing its capital structure to ensure it is able to support project development and growth, besides monetising selected land bank to raise funds, which will be a key area in 2021.

As property sales are the group's key source of revenue, S P Setia said it had accelerated the adoption of digital technologies to engage with potential buyers online by launching two apps, namely Setia On The Go and Setia Virtual-X, with various targeted advertising and promotional activities during the movement control order (MCO) period.

To recap, the property developer returned to the black in the fourth quarter ended Dec 31, 2020 (4QFY20) with a net profit of RM55.49 million, from a net loss of RM263.43 million for the immediate preceding quarter, due to the absence of an impairment loss of RM336.3 million from its 40%-owned British joint venture (JV) Battersea Project Holding Co Ltd.

Its quarterly revenue also recovered by 3.08% quarter-on-quarter to RM1.11 billion from RM1.08 billion for 3QFY20.

However, on a yearly basis, net profit dropped by 24.03% year-on-year (y-o-y) to RM55.49 million from RM73.04 million for 4QFY19, but quarterly revenue grew by 39.88%.

For the full FY20, however, S P Setia was in the red with a net loss of RM321.03 million against a net profit of RM353.75 million a year earlier.

At the time of writing today, S P Setia was down three sen or 2.73% to RM1.07, with some 1.22 million shares traded. At RM1.07, the group had a market capitalisation of RM4.3 billion.

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