PETALING JAYA: S P Setia Bhd registered a stellar sales performance of RM2.71bil in the first half of its current financial year ending Dec 31, 2021, in spite of the adverse impact of the pandemic on the local property sector.
Local projects contributed RM2.07bil or approximately 77% of total sales during the period, while the remaining RM639mil or 23% was contributed by international projects, mainly from Daintree Residence in Singapore.
In a statement yesterday, the property developer said demand for residential properties across the causeway had gained traction following the upliftment of the circuit breaker and opening up of the economy.
“The group achieved a revenue of RM2.14bil and pre-tax profit of RM301.4mil in the two quarters under review.”
S P Setia said both revenue and pre-tax profit for the first six months of 2021 were higher than the corresponding period in the preceding year, mainly driven by progressive revenue recognition from strong take-up rates achieved and higher sales of completed inventories of RM425mil, an increase of 137% as compared to RM179mil for the corresponding period in the preceding year.
“On the local front, sales were primarily derived from the central region at RM1.64bil, followed by contribution from the southern region at RM296mil while another RM142mil was from the other regions.
“It is also worth noting that completed inventories worth RM425mil were also cleared during these six months.”
In the same statement, S P Setia president and chief executive officer Datuk Khor Chap Jen said the results achieved for the first half of 2021 were largely attributed to the strong sales performance for the first five months of the financial year, which was buoyed by a generally upbeat local market sentiment.
senior executive vice president Datuk Koe Peng Kang with a model of a project. - SHAARI CHEMAT /The Star" src="https://apicms.thestar.com.my/uploads/images/2021/08/19/1261544.jpg" onerror="this.src='https://cdn.thestar.com.my/Themes/img/tsol-default-image2017.png'" style="width: 620px; height: 400px;">SP Setia Bhd senior executive vice president Datuk Koe Peng Kang with a model of a project. - SHAARI CHEMAT /The Star
“However, the onset of the full movement control order in June 2021 had slowed down the conversion of bookings into confirmed sales.
“Nevertheless, we are heartened to see that bookings received as of June 30 stood at RM954mil.”
Khor said a total gross development value (GDV) of RM687mil landed properties, comprising mostly affordable double-storey terrace and/or semi-detached homes, were launched during the period with high take-up rates seen, especially in established and matured townships.
“Setia Alam and Bandar Kinrara’s bookings hovered above 90% for the said launches,” he said.
As at June 30, 2021, S P Setia had 47 ongoing projects, with an effective remaining land bank of 7,483 acres valued at a GDV of RM125.1bil and total unbilled sales of RM10.3bil, which will tide the group over the next two years.
For the second half of its current financial year, S P Setia said it will be offering new launches worth RM2.47bil in its various townships.
This will include Setia Alam, Setia Ecohill 2, Setia Eco Park, Setia Eco Glades, Setia Mayuri, Temasya Glenmarie, Bandar Kinrara, Setia Alam Impian and Kota Bayuemas in the central region, Setia Fontaines in Penang, and Taman Rinting, Taman Industri Jaya and Setia Tropika in the southern region.
“In May 2021, the group announced the conditional sale and purchase agreement for the disposal of eight parcels of land measuring 959.7 acres in Tebrau, Johor for a total consideration of RM518.1mil by its indirect wholly-owned subsidiary, Pelangi Sdn Bhd.
“Through monetising these land banks in Johor, the proceeds from this land sale will be utilised to pare down the group’s borrowings. With this divestment, the group continues to hold more than 1,000 acres of landbank in Johor,” said S P Setia.
Overall, Khor said the group remained positive on the market outlook and will continue to focus on achieving its sales target of RM3.8bil. “We remain optimistic yet cautious, underpinned by the strong pent-up demand from home buyers under the pandemic backdrop.”
Khor said he expects the economy in general and the property sector specifically to recover gradually in the coming quarters on the back of the rollout of the vaccination programme to achieve herd immunity, as well as the imposition of various standard operating procedures in the fight against Covid-19.
“Once these efforts are successful in curbing the pandemic, it is our hope that the economy will be reopened in stages and its recovery process will be expedited,” he said.
Given the commendable strong start to S P Setia’s sales performance for the first half of 2021, Khor said the group will continue to strive to maintain its sales momentum, while at the same time continuing the emphasis on its strategic priorities to strengthen and optimise capital structure alongside its efficient land bank utilisation.
An analyst said S P Setia’s strong earnings could be attributed to the group’s aggressive promotional campaigns, pent-up demand from potential buyers and incentives under the nationwide home ownership campaign (HOC).
“With almost RM3bil sales achieved in the first half of this year already, we’re confident S P Setia can hit its sales target for 2021,” he said.
The government reintroduced the HOC in June last year under the Penjana initiative to boost the property market after it was adversely affected by the Covid-19 pandemic.
The campaign has been extended to the end of this year, with property consultants and developers fully supporting the move.
In March this year, during the Real Estate and Housing Developers’ Association’s briefing on the property market for 2021, its president Datuk Soam Heng Choon revealed that since the HOC was reintroduced last June, a total of 34,354 residential units valued at RM25.65bil had been sold as at Feb 28, 2021.