SP Setia posts RM321 mln net loss for FY20

Revenue slipped to RM3.228 billion from RM3.93 billion previously, as the site work at all projects were significantly disrupted during the Movement Control Order (MCO) and Conditional Movement Control Order (CMCO) period significantly impeding revenue recognition, it said.

In a filing with Bursa Malaysia today, SP Setia said besides that, the group also took in two impairment provisions in the second quarter of 2020 (2Q20) and 3Q20 respectively, which had impacted its year-to-date results for the year.

“The group resolved to aggressively reprice the inventories at Setia Sky 88 project in Johor Bahru and Setia Sky Vista project in Penang, which had been completed for some time, to expedite their clearance and to conserve cash flow. It accounts for an impairment of completed inventories of RM139.6 million.

“On the other hand the group equity account for its 40 per cent share of the impairment provision recognised by Battersea Project Holding Company Ltd group of £62.4 million (RM336.3 million),” it said.

However, the group noted it had surpassed its targeted sales of RM3.8 billion by achieving a commendable total sales of RM3.82 billion amidst the COVID-19 pandemic.

Against the backdrop of this noteworthy accomplishment and complemented by a revenue of RM3.23 billion achieved by the group, impairment provisions of RM475.9 million made in 2Q20 and 3Q20 nevertheless resulted in the group registering a loss, it said.

President and chief executive officer Datuk Khor Chap Jen said it was also worth noting that the group recorded a significant surge of RM1.56 billion in sales during the last quarter of FY20 against the backdrop of a resurgence in COVID-19 cases and subsequent reimplementation of the MCO, and a substantial RM1.45 billion of bookings in the pipeline.

“We continue to see genuine buyers who are still looking to own properties and to invest at this time to take advantage of the many promotions and offerings made available,” he said.

The group said local projects contributed RM3.11 billion (81 per cent) of the sales while the remaining RM716.0 million were contributed largely by international projects.

On the local front, it said sales were mainly from the Central region with RM2.28 billion, aided by RM312.0 million contribution from the Northern region while the Southern region contributed RM415.0 million.

“We managed to clear RM695.0 million of completed inventories in FY20 and will continue to do so in FY21.

“Riding on the upsurge in sales momentum during 4Q20, SP Setia will maintain its sales target of RM3.8 billion for FY21. There are positive sentiments and optimism arising from the mass vaccination programme, which will be rolled out in stages globally and across Malaysia,” Khor said.

He added that moving forward the group will continue fast-tracking its digital transformation journey and enhancing digital touchpoints to reach and engage with potential customers while implementing new measures to reorient the product offerings and optimising its land banks utilisation as part of the strategies to build resilience against future disruptions.