S P Setia reports 25% higher revenue for 3Q2023

• The group secured total sales of RM3.89 billion for the nine months endedSept 30, 2023. Local projects contributed RM3.37 billion, or approximately 87% of the sales, while the remaining RM523 million or approximately 13%, were generated from international sales.

KUALA LUMPUR (Nov 23): S P Setia Bhd has released its financial results for the thirdquarter of 2023 (3Q2023), with QoQ revenue growing 25% to RM1.08 billion from RM860.9 million. Net profit came in at RM51.8 million in the 3Q ended Sept 30, 2023.

The group secured total sales of RM3.89 billion for the nine months ended Sept 30, 2023. Local projects contributed RM3.37 billion, or approximately 87%of the sales, while the remaining RM523 million or approximately 13%, were generated 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. As of Sept 30, 2023, the group has secured a total booking of RM450 million.

During 3QFY2023, S P Setia launched a number of projects, including RM498.7 million of landed properties in the Central and Southern regions and 2-storey commercial retail and office units of the Setia Fontaines City Centre Business Hub in Penang.

The company revealed that take-up rate for these new developments has been encouraging, with a 97% occupancy rate observed in the new phase of landed residential units in Bandar Kinrara and approximately 60% of units sold in townships such as Setia Bayuemas and Setia Fontaines.

Landbank strategy

S P Setia also just announced the sale of 17.99 acres of land in Setia City, Selangor, as part of its landbank strategy.

The land will be sold to KSL Bestari Sdn Bhd for RM228.8 million, boosting the development of Setia City and contributing to the the company’s bottom line. Proceeds will fund new projects and reduce debt, positively affecting profits, net assets, and cash balance.

S P Setia stated that it remains focused on maintaining a sustainable overall performance. With 44 ongoing projects and unbilled sales of RM6.76 billion as of Sept 30 2023, “the group demonstrates positive earnings visibility in the short to mid-term despite the challenging economic conditions and market headwinds”.

The group “remains vigilant in balancing its capital structure and effectively manage de-gearing program in pursuits of a sustainable overall performance”. The net gearing ratio at the end of 3Q2023 stood at 0.53x, reduced from 0.57x as at Dec 31, 2022.

S P Setia holds an effective remaining land bank of 5,549 acres with an estimated GDV of RM113.11 billion, ensuring a strong foundation for future growth.

International front

S P Setia expanded internationally by acquiring a prime land site in St Leonards, Sydney, Australia. With a land area of 1,374 sq m, this acquisition marks the company's first venture into New South Wales.

It aims to establish a prominent presence in the highly sought-after Sydney property market. This strategic move reinforces S P Setia's commitment to regional growth and contributes to the future revenue pipeline for the group.

Meanwhile, UNO Melbourne (Stage 2) development project in Australia has been completed in September 2023 and is expected to significantly contribute to the final quarter’s results.

‘Vigilant in managing our capital structure’

Datuk Choong Kai Wai (pictured), president & CEO of S P Setia stated: "We are pleased with our robust sales performance and progress in expanding our presence locally and internationally. This has been possible due to our ability to anticipate market changes, continued brand loyalty among our customers, and our commitment to quality in our projects. 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," he added.

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