PETALING JAYA: S P Setia Bhd’s earnings momentum is expected to be driven by its development plans overseas and diversified portfolio.
The property group remains positive in its outlook for financial year 2024 (FY24), leveraging its strength and diversified portfolio to achieve a sales target of RM4.4bil.
“We remain optimistic in the group’s trajectory this year, with key focuses in accelerating township developments, large-scale industrial developments and strengthening our international presence,” president and chief executive officer Datuk Choong Kai Wai said in a statement yesterday.
S P Setia expects to maintain its existing presence in Vietnam and Australia, where it plans to strengthen through the development of the newly-acquired Sydney land.
Moreover, among other key developments that will contribute and propel the group’s growth include the central region – industrial offerings in Setia Alaman Industrial Park, Klang, Selangor, and the two residential towers by Setia Federal Hill in Jalan Bangsar, Kuala Lumpur.
For the fourth quarter ended Dec 31, 2023, the property group’s net profit rose by 71% year-on-year (y-o-y) to RM148.2mil translating to earnings per share of 3.53 sen. Group’s revenue however dropped by 19% y-o-y to RM1.38bil.
For the financial year ended Dec 31, 2023 (FY23), the company’s net profit was down by 1.9% y-o-y to RM298.6mil while revenue dropped by 2% to RM4.4bil.
S P Setia achieved 17% higher pre tax of RM656mil in FY23 compared to RM559mil in FY22, while persisting through the challenges in the operating environment as fluctuations of foreign exchange and interest rates put pressures on the group’s bottom line.
S P Setia is optimistic about the local real estate sector, fuelled by catalysts such as the Malaysia My Second Home Visa Liberalisation Plan and Stamp Duty Exemption for first-time buyers, with the country’s gross domestic product expected to grow between 4% and 5% this year.
S P Setia said the driving force behind the company’s sales is its local projects, accounting for a significant portion of revenue with RM4.41bil, or 86% of total sales in 4Q23.
S P Setia also added the central region proved crucial for the group, contributing RM3.3bil in sales, followed by the southern region of RM860mil. Additionally, the northern and eastern regions made valuable contributions totalling RM247mil.
Moreover, the group further reduced its borrowings by RM1.3bil, bringing down the net gearing ratio to 0.49 times from 0.57 times in FY22, enabling better capital optimisation and deployment across the development pipelines for future growth.
S P Setia said its sales success is supported by multiple factors, including its robust sales pipeline anchored by 41 ongoing projects, with a remaining land bank of 6,311 acres and an effective remaining gross development value of RM119.74bil.
For FY23, the board has declared a dividend of 1.34 sen per share.