SP Setia earnings down 45% in first quarter

> Drop due to its Australian property project receiving marginal recognition

PETALING JAYA: SP Setia Bhd’s net profit for the first quarter ended March 31 fell 45% to RM61.49 million from RM112.12 million a year ago mainly due to the property development segment where its Australian project received marginal recognition.

Its revenue dropped 36% to RM665.50 million from RM1.03 billion mainly on marginal recognition from the Parque Melbourne project for the current quarter compared to the previous corresponding quarter, where revenue was substantially recognised upon settlement based on the completion method previously.

“As majority of the units in Parque Melbourne has been settled in previous quarters, revenue contribution for the current quarter has hence dropped,” it said.

Over the same period, the group secured sales of RM1.11 billion. Local projects contributed RM635.6 million, which represented 58% of the total sales while international projects contributed RM469.1 million, which represented the remaining 42% of the total sales.

“Despite the softer sentiment and majority of the public taking a cautious approach, the RM1.11 billion sales achieved were within expectations and also validates the strategy SP Setia has adopted for the local market in rolling out more mid-range landed properties in our established townships,” said SP Setia president and CEO Datuk Khor Chap Jen.

The group’s prospects going forward remain positive with total unbilled sales of RM7.95 billion, anchored by 46 ongoing projects and effective remaining land banks of 9,586 acres with a gross development value of RM139.72 billion as at March 31.

“With a sustained momentum and strong sales achieved to date, we are optimistic of meeting the sales target of RM5 billion for the current financial year.”