S P Setia president and chief executive officer Datuk Choong Kai Wai.
PETALING JAYA: S P Setia Bhd reported a net profit of RM404mil for the six-months period ended June 30, 2024 (1H24), an increase from last year’s profit of RM121mil, as it gained RM361mil profit from strategic monetisation of its landbanks in Taman Pelangi Indah 2, Johor and Glengowrie, Semenyih.
Revenue in 1H24 rose to RM2.97bil from RM1.9bil in the previous corresponding period.
In a statement, the property developer said the completion of these land deals marked a strong financial milestone for the group.
In the second quarter of 2024 (2Q24) ended June 30, 2024, the group concluded the disposal of its 50% equity stake in Retro Highland Sdn Bhd to MMC Land Sdn Bhd pertaining to Taman Ikan Emas, Cheras redevelopment project under the public-private strategic partnership with Dewan Bandaraya Kuala Lumpur.
“The settlement was via a full cash consideration, which resulted in a RM56mil profit for the group during the period.”
S P Setia said total land and development sales achieved for year-to-date 2Q24 was RM2.3bil, surpassing more than 50% the group’s financial year 2024 (FY24) target of RM4.4bil.
“Local projects contributed approximately 96% of the group’s development sales, with the Central region dominating the development sales (60%) mainly from Setia Alaman industrial park’s contribution.
“In Johor, the southern region’s robust sales performance accounts for approximately 35% of the group’s development sales, with further growth potential expected from the RTS Link infrastructure development and Special Economic Zone establishment towards the later part of the year.”
In the same statement, S P Setia president and chief executive officer Datuk Choong Kai Wai said he was optimistic on the group’s operations and financial outlook for the rest of the financial year.
“This performance underscores our strategic focus on the Malaysian market, particularly in the southern and central regions,” he said.
Leveraging on the rising market demand for industrial development, Choong said S P Setia will continue exploring feasible investment opportunities and potential strategic partnerships for its lands that are currently earmarked for industrial park development, particularly in Setia Alaman and the Southern Region.
The group is poised to unveil major projects such as the first phase of Setia Federal Hill in Jalan Bangsar, Kuala Lumpur with an estimated gross development value of (GDV) RM1.4bil.
As of June 30, 2024, the group boasts a portfolio of 41 ongoing projects, supported by a robust land bank of 5,261 acres valued at a GDV of RM106.69bil. Total unbilled sales stand at a notable RM4.16bil.
The group has cemented its presence in Malaysia’s key economic centres, namely the Klang Valley, Johor Bahru, Penang, and Sabah.
Moreover, the group has expanded its international footprint, with notable projects in Vietnam, Australia, Singapore, China, the United Kingdom and Japan.
Additionally, S P Setia said it achieved successful de-gearing strategies in 1H24.
“From RM10.1bil borrowings in 4Q23, it has declined significantly by RM700mil within six months to RM9.4bil as of 2Q24.
“Net gearing ratio has consistently strengthened over the past few quarters to 0.41 times per 2Q24, compared to 0.49 times in 4Q23 due to the effectiveness of the group’s debt management and capital allocation strategies.”
S P Setia also said it has seen steady progress of inventories clearance so far this year.
“The company achieved RM244mil reduction of stocks compared to 4Q23 level, representing a 15% clearance progressively taking place through a concerted effort throughout the group.”
