SP Setia’s property sales exceed target for 2018

KUALA LUMPUR: Property developer SP Setia Berhad raked in sales of RM5.12 billion for 2018, surpassing its target of RM5 billion.

The company announced its full-year 2018 results today. Revenue stood at RM3.59 billion while profit attributable to shareholders was RM671 million.

SP Setia announced a final dividend of 4.55 sen per share bringing the total dividend for 2018 to 8.55 sen per share, which translates into a dividend payout ratio of 70%.

Local projects contributed RM4.12 billion or 80% of sales while international projects made up RM1 billion or 20% of sales.

On the local front, the sales secured were largely from the central region with RM3.11 billion. The southern region contributed RM805.1 million while the northern and eastern regions combined contributed RM206.6 million in sales.

In respect of international projects, UNO Melbourne continued to outperform with sales of RM653.6 million while Sapphire by the Gardens added another RM65.5 million in sales.

“We are pleased with this sales achievement as it demonstrates the resilience and versatility of Team Setia in navigating the various headwinds in a subdued property market,” said Khor Chap Jen, the chief executive of S P Setia, at a briefing to the media after the results were announced.

On Dec 14, 2018, S P Setia achieved a milestone with Battersea Phase 2 Holding Company Limited signing a sale and purchase agreement (SPA) with PNB-Kwasa International 2 Limited (JVCo), a joint venture company formed by Permodalan Nasional Berhad (PNB) and the Employees Provident Fund Board (EPF), to acquire the commercial assets in Phase 2 of the Battersea Power Station (BPS) development for a base consideration of £1.58 billion (RM8.33 billion).

S P Setia owns a 40% stake in Battersea Phase 2 Holding Company Limited. This will enable S P Setia to get £0.63 billion (RM3.33 billion) in sales from this transaction.

If this sale is taken into consideration, it will add up to a total sales income of RM8.45 billion for financial year (FY) 2018

In FY2019, S P Setia plans to launch RM6.8 billion worth of properties, comprising RM6.66 billion in local launches and RM139 million in international launches, comprising new phases in Eco Lakes and Eco Xuan in Vietnam.

The local launches will be concentrated in the central region with planned launches of RM4.98 billion.

In addition, S P Setia will continue to launch new phases in the group’s established developments such as Setia Alam, Bandar Kinrara, KL Eco City and Setia Ecohill 2 as well as rebranded projects of Setia Alamsari, Alam Sutera and Kota Bayuemas in the central region.

Planned launches in the southern region amount to RM1.17 billion, largely from Setia Tropika, Bukit Indah, Setia Indah, Setia Eco Gardens and Taman Industri Jaya.

As for the northern region, the planned launches involve RM349.3 million while that in the eastern region involves RM163.5 million.

In the northern region, the company does not plan any new launches on Penang island but Setia Fontaines will launch its maiden residential properties priced at RM330,000 onwards on the mainland of Penang following the well-received launch of the shop offices in FY2018.

Asked about the company’s outlook for the property market in 2019, Khor said: “We see the residential property market has bottomed out in 2018 and the demand is still there but a lot hinges on the sentiment, economic scenario and whether the government would further introduce measures to boost the market.”

“S P Setia has set a sales target of RM5.65 billion for FY2019. We expect 89% of this to be derived from the local projects. This represents a sales growth of about 10% and will further solidify S P Setia’s position as the leading property developer in Malaysia,” added Khor.

Underpinned by an unbilled sales pipeline of RM12.32 billion, 45 ongoing projects and effective remaining land banks of 9,516 acres (3850ha) with a gross development value of RM149.70 billion as at Dec 31, 2018, the group is expected to perform resiliently against prevailing market challenges.