PETALING JAYA: Phillip Capital Research has trimmed its financial year ending March 31, 2025 (FY25), and FY26 earnings targets for property developer Skyworld Development Bhd
by 13% to 25% to account for the delayed launch of SkyAmanyi and a higher effective tax rate.
“We raise our FY27 earnings by 1% after incorporating a better progress recognition for SkyAmanyi,” it said in a report, adding that it is maintaining its target price of RM1.10 per share and its “buy” call, as it continues to like SkyWorld’s robust project pipeline.
This pipeline is driven by its recent RM13bil venture into Penang’s affordable housing segment, the research house added.
At last look, SkyWorld shares were at 47 sen a share.
In its report, Phillip Capital Research said key risks to its call included lower-than-expected property sales and higher building material prices.
It said SkyWorld’s results for the nine months of FY25 (9M95) came in below its, and consensus estimates due to a delayed launch and higher effective tax rate.
“Expect sequential stronger 4Q25 results on increased project handover,” it added.
It noted that 9M25 revenue and core net profit declined 38% and 62% year-on-year (y-o-y), respectively.
The weaker results were mainly attributable to a lower number of ongoing projects, coupled with delays in planned launches including SkyAmanyi, Cheras (around RM600mil gross development value), due to additional geotechnical evaluations.
The earnings before interest, taxes, depreciation and amortisation (ebitda) contracted 6.8 percentage points y-o-y to 18% in the absence of project finalisation savings from two projects.
“Overall, 9M25 came in below expectations at 64% of our previous FY25 estimates and 58% of the street’s forecasts.
“The variance to our forecast was due to delay in new launches and higher effective tax rate.”
Sequentially, 3Q25 revenue declined 13% quarter-on-quarter (q-o-q) to RM108mil as EdgeWood @ SkySanctuary is near completion, partly cushioned by stronger progress billings from Curvo and Vesta.
The ebitda margin improved 4.2 percentage points q-o-q to 20.2%, supported by improved progress milestones for Curvo and Vesta coupled with finalisation of cost savings from SkyMeridien, it said.
The effective tax rate was higher at 37%, reflecting deferred tax from prior years. Overall, core earnings grew 16% q-o-q to RM12mil, it added.
The research house expected 4Q25 to deliver stronger sequential earnings, driven by higher progress billings from ongoing projects, coupled with the final milestone billings from the completion of EdgeWood and SkyVogue.
