SP Setia’s Q1 profit sinks 14% on higher taxation

KUALA LUMPUR: SP Setia Bhd’s net profit for the first quarter ended March 31, 2019 fell 14.1% to RM52.83 million from RM61.49 million a year ago mainly due to higher taxation.

The group’s effective tax rate (excluding share of results of joint ventures and associated companies) for the financial period is higher than the statutory tax rate due to certain non-tax deductible expenses.

Its revenue rose 31.9% to RM864.91 million compared with RM655.5 million in the previous year’s corresponding quarter on the back of progressive revenue recognition from strong take-up rates in the final quarter of FY2018 from its mature townships in Central and Southern region.

Over the same period, the group secured sales of RM718 million. Local projects contributed RM678 million, which represented 94% of the total sales while international projects contributed RM40 million.

SP Setia said the “wait-and-see” attitude continues to linger as purchasers await positive leads for the property market to recover.

Its president & CEO Datuk Khor Chap Jen said in the first quarter, the group launched properties worth RM339 million in gross development value (GDV), comprising mainly landed properties.

For the remaining part of the financial year, the group has planned a total of RM6.47 billion worth of launches, focusing in Klang Valley with RM4.65 billion and Johor with RM1.12 billion.

“The group is monitoring the property market closely and with the pipeline of diversified products, mainly concentrated on landed residential properties, we will roll out more launches the moment the property market picks up,” said Khor.

Its unbilled sales stood at RM10.95 billion as at March 31, 2019.

Given the planned launches in the pipeline as well as the campaigns and initiatives in place to promote home ownership, the group is working towards the sales target of RM5.65 billion for the current financial year.

At the midday break, SP Setia’s share price was down 3 sen or 1.37% to RM2.16 on 699,000 shares done.