KUALA LUMPUR (Feb 23): S P Setia Bhd posted net profit of RM424.8 million for the fourth quarter ended Dec 31, 2016 (4QFY16), bringing its total bottomline in FY16 to RM808.03 million.
In a filing to Bursa Malaysia today, S P Setia said its property development division achieved profit before tax (PBT) of RM594.77 million and revenue of RM1.63 billion in 4QFY16.
Its board recommended a final dividend of 16 sen per share for FY16, which will be paid on a date to be fixed.
For the full year FY16, the division achieved PBT of RM1.17 billion and revenue of RM4.48 billion, contributed by various ongoing projects in Malaysia as well as Singapore, London and Australia.
For the construction segment, the group posted loss before tax (LBT) of RM5.14 million and revenue of RM106.1 million, whereas in FY16, it recorded PBT of RM5.94 million and revenue of RM306 million.
Topline from the construction sector was mainly generated by the construction of the Subterranean Penang International Convention & Exhibition Centre (SPICE) in Penang, Kompleks Institut Penyelidikan Kesihatan Bersepadu (1NIH Complex) in Setia Alam and a commuter station in KL Eco City.
Meanwhile, its other operations involving wood-based manufacturing, trading activities and the operation of retail mall and the Setia City Convention Centre contributed LBT of RM62.39 million and revenue of RM37.5 million in 4QFY16, while it posted PBT of RM5.85 million and revenue of RM192.08 million in FY16.
The group said its total FY16 sales stood at RM3.82 billion, surpassing its revised sales target of RM3.5 billion. Of that, RM3.5 billion or 92% was contributed by its local projects, largely in the Central region.
On the international front, the group plans to launch two projects in Australia, namely the sites in Prahran and Exhibition Street in Melbourne.
At the same time, it is also on the lookout for new land banking opportunities in Australia.
"In the UK, the success of securing a long-term lease contract for 500,000 square feet of office space in Phase 2 of the Battersea Power Station from Apple Inc will strongly enhance and reinforce our aim of place making as well as to uplift the value at Battersea Power Station, notwithstanding the mid-term market challenges such as the Brexit issue," S P Setia said.
The Battersea Power Station witnessed the staggered completion and handover of Phase 1 units. As of December 2016, two of 12 blocks had been completed and delivered to the purchasers.
The remaining 10 blocks will be completed and handed over by 2QFY17, the group said.
As for Malaysia, the group targets to roll out more mid-priced landed properties and affordable housing. There will be limited rollout of properties under the 10:90 scheme in FY2017.
It will also launch Tower B condominium of Setia Sky Seputeh at Taman Seputeh as well as the transit-oriented development of TRIO apartments by Setia at Bukit Tinggi, Klang.
As for its renounceable rights issue exercise, which the group completed on Dec 6, 2016, the group will use the gross proceeds totalling RM1.13 billion to fund its current working capital requirements as well as for future property development and expansion plan.
This fund raising exercise in the current challenging market augurs well for the group's land bank expansion plan, it said, as it was timely to fund a significant land acquisition, specifically the purchase of five adjoining parcels of freehold land measuring approximately 1,675 acres in Seberang Perai Utara for a purchase consideration of RM620.1 million.
"The said land acquisition marks another key milestone in the group's strategic expansion plan and to venture into new markets, as it represents the group's maiden entry into the mainland of Pulau Pinang," it said.
The said land is located within the Butterworth-Sungai Petani Growth Corridor with accessibility from North-South Highway via Bertam Interchange, and is planned for an eco-themed mixed development township with a potential gross development value (GDV) of approximately RM9.6 billion spanning over 15–20 years.
"In addition to the above said land acquisition, the group will continue to search for more strategic land bank to replenish the existing acreage, especially in Klang Valley and Johor Bahru in Malaysia and also in Australia," it said.
Moving forward, S P Setia has set a sales target of RM4 billion in FY17, approximately 77% of which is expected to come from local projects.
S P Setia closed this morning's session 1 sen or 0.29% higher at RM3.40 for a market value of RM9.7 billion.