KUALA LUMPUR (Feb 26): SP Setia Bhd registered a 26.83% drop in fourth quarter net profit at RM70.13 million from RM95.85 million a year earlier, mainly on lower property development revenue amid a challenging year plagued by geopolitical issues such as the US-China trade tension and unrest in Hong Kong, and as real estate companies contended with persistent tight lending criteria in Malaysia.

In a statement to Bursa Malaysia today, SP Setia said its property development segment achieved lower revenue of RM731.43 million in the fourth quarter ended Dec 31, 2019 (4QFY19) versus RM930.53 million.

"The group’s property development segment achieved revenue of RM731.43 million and profit before tax (PBT) of RM115.63 million in 4QFY19. Both revenue and PBT for the current quarter are lower than the corresponding quarter in FY18 partly due to the higher volume of development phases completed and handed over in the last quarter of FY18," SP Setia said.

For 4QFY19, SP Setia, which declared a dividend of one sen a share, said group revenue stood at RM796.17 million versus RM1.02 billion.

This brings SP Setia’s full-year FY19 revenue to RM3.93 billion, from RM3.59 billion a year earlier. Net profit, however, dropped to RM343.72 million from RM665.26 million, the company said.
 
"SP Setia achieved total [property] sales of RM4.56 billion, hitting the RM4.55 billion sales target of FY19 despite a challenging year that was plagued with global geopolitical issues such as the US-China trade tension, unrest in Hong Kong as well as persistent tight lending criteria locally," SP Setia said.

SP Setia said it is maintaining its property sales target at RM4.55 billion for FY20 by leveraging on the versatility of its products.

"Nevertheless, with the global outbreak of Covid-19 ongoing and its impact on the economic outlook remaining uncertain, the group will monitor closely how the situation unfolds. Underpinned by an unbilled sales pipeline of RM10.67 billion, 48 ongoing projects and an effective remaining land bank of 3,543ha (8,858 acres) with a GDV (gross development value) of RM141.84 billion as at Dec 31, 2019, the group is expected to remain resilient against prevailing market challenges," it said.

At 3:38pm today, SP Setia shares were traded unchanged at RM1.28 for a market capitalisation of RM5.17 billion. It latest reported net assets per share stood at RM3.02.