S P Setia completes RM564mil Johor land sale
PETALING JAYA: S P Setia Bhd has completed the disposal of its 960-acre land parcel in Tebrau, Johor to Senibong Island Sdn Bhd, in a cash deal worth RM564mil.

The group said the transaction, conducted through its subsidiary Pelangi Sdn Bhd, has strengthened the company’s financial standing and is expected to contribute to an after-tax profit of RM332mil.

S P Setia president and chief executive officer Datuk Choong Kai Wai, in a statement yesterday said the sale of the land complements the group’s degearing efforts, as it continues its attempt to manage its capital structure, rationalising costs, and channelling its resources into fast-developing projects.

He commented that the direction would enable S P Setia to be better positioned for expansion and long-term sustainability.

In addition, the group said it will continue to direct its efforts into other revenue streams through landbank management, industrial development and continuing with regional expansion in Vietnam and Australia, on top of its execution of township projects in line with market demand.

It has also begun pre-initial public offering preparatory work to explore the establishment of a real estate investment trust to showcase a diverse asset portfolio, which could include retail complexes, office buildings, schools and a convention centre.

Choong believes that the group’s strategy to realise the values of its identified land assets has further enhanced S P Setia’s financial state, lending stronger support to its efforts for income base diversification.“We remain committed to our ethos of excellence and innovation, driving growth while delivering superior value to our stakeholders,” he added.

For its first quarter ended March 31, 2024 (1Q24), the property developer saw net profit jumping 39.4% year-on-year (y-o-y) to RM77.3mil, as revenue soared 52.5% to RM1.48bil.

Analysing its results, S P Setia said its property development segment achieved a 57.1% y-o-y increase in revenue to RM1.41bil.

This was primarily due to the higher contribution from Vietnam with the handover of its Eco Xuan project in Ho Chi Minh City and higher domestic property development turnover.

That aside, higher gross earnings also contributed to its improved profits, although this was partially reduced by increased financing cost.

On top of property development, S P Setia revealed in a statement that revenue from other operations had mainly consisted of manufacturing and investment properties such as office towers, retail malls, convention centres and hotels.

Reduced loss from its construction segment, coupled with higher contribution from investment properties and hotel operations have also turned a RM14.5mil loss for these divisions in the corresponding quarter of 2023 into a RM400,000 pre-tax profit for 1Q24, it said.

Meanwhile, compared with the preceding three months ended Dec 31, 2023, earnings dropped 47.8% from RM148.2mil, despite revenue actually growing 6.7% from RM1.38bil.
Corporate News,SPSetia,LandSale,Degearing,FinancialStrength,Expansion,Vietnam,Australia,REIT,Diversification
S P Setia Bhd has completed the disposal of its 960-acre land parcel in Tebrau, Johor to Senibong Island Sdn Bhd, in a cash deal worth RM564mil.