SP Setia’s 1Q net profit dips 43.78%, weighed down by MCO
By FocusM |   |  Mainstream, Property

KUALA LUMPUR: SP Setia Bhd’s net profit dipped 43.78% year-on-year (y-o-y) to RM56.12 mil for the first quarter ended March 31 from RM99.83 mil previously, weighed down by the Movement Control Order (MCO) imposed to curb the Covid-19 pandemic.

In a filing with Bursa Malaysia today, the property developer said the closure of sales offices, construction sites and social activities had disrupted its business operations; hence the lower profit contribution in the current quarter.

For the period under review, revenue also shrank 18.76% y-o-y to RM702.66 mil from RM864.91 mil previously.

In a separate statement, SP Setia said it has revised its sales target for the financial year ending Dec 31, 2020 to RM3.8 bil from RM4.55 bil set earlier as the group expects that it will take some time for economic activities to recover.

“The continued practice of social distancing over the extended conditional MCO period will impact construction progress.

“Job security concerns remain heightened, and consumers will be more cautious about their spending, especially in purchasing ‘big ticket’ items such as properties,” it added.

President and CEO Datuk Khor Chap Jen said in addition to the sales of RM470 mil secured in 1Q20, the group also secured RM723 mil worth of bookings in the same period.

“During the extended conditional MCO period, the focus will be on the swift conversion of these bookings into sales,” he added.

Khor said the outlook for FY2020 remains challenging and uncertain as the full impact of the pandemic has not been ascertained.

However, he said SP Setia remains resilient as unbilled sales totalling RM9.8 bil places the group in good stead during this challenging time, and would see the group through over the next two years.

Moving forward, other than focusing on clearing the completed inventories, SP Setia said it will remain prudent with limited new launches, concentrating on the mid-range landed units in established townships to cater to the demand of owner-occupiers.

“The group is also anchored by 48 ongoing projects and an effective remaining land bank of 3,528.05ha with a gross development value of RM138.87 bil as at March 31, 2020,” it added.

At the close, SP Setia’s share price went down 1.5 sen to 77.5 sen, with 5.75 million shares changing hands. - May 14, 2020, Bernama

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