Land disposals worth over RM1bil have led to a surge in S P Setia Bhd’s pre-tax profit by 2.3 times year-on-year to RM853mil in the nine months ended Sept 30, 2024 (9M24).

In the period, the property developer sold land in Glengowrie, Semenyih; Taman Pelangi Indah, Johor Baru and Setia Alam, Shah Alam that yielded RM1.27bil and RM634mil in revenue and profit contributions, respectively.

Additionally, higher revenue from both central and southern regions also contributed to the overall improved performance, said S P Setia in a statement.

“Paired with effective cost management initiatives, this solid performance underscores the group’s ability to navigate market challenges and achieve sustained profitability,” the company added.

S P Setia noted that its property development segment achieved a total revenue of RM4.03bil and pre-tax profit of RM799.8mil in 9M24 – significantly higher than the performance last year.

In 9M24, the group recorded total sales of RM3.2bil, with local projects contributing RM3bil.

About 94% of the sales were driven primarily by the southern and central regions, bringing in RM1.58bil and RM1.37bil, respectively.

As of Sept 2024, S P Setia has locked in RM556mil of sales in the pipeline.

The property development segment contributed RM477mil, while the Setia Alaman industrial segment added RM79mil.

For the remainder of the year, the group aims to launch an estimated RM1.97bil in residential, commercial, and industrial properties with over 62% concentrated in the central region.

On the international front, S P Setia has launched its latest Australian project, ATLAS Melbourne, a 73-storey mixed development located at 383 La Trobe Street in Melbourne’s central business district.

With a gross development value (GDV) of RM2.7bil, the project will progress in stages.Phase one construction is slated to start in the first half of 2026, with completion expected by 2028. The remaining phases are scheduled for completion by mid-2029.

“ATLAS Melbourne marks a significant milestone in our international expansion strategy, reflecting our confidence in the Australian market,” said president and chief executive officer Datuk Choong Kai Wai.

With 42 ongoing projects and unbilled sales totalling RM3.5bil as of Sept 30, 2024, the group said it has strong earnings visibility for the short to mid-term.

S P Setia’s next significant investment in Kuala Lumpur is the Setia Federal Hill phase one project, with an estimated GDV of RM1.4bil.

The project is undertaken in partnership with Mitsui Fudosan. The official launch is expected in early 2025.

S P Setia also highlighted that its net gearing ratio continues to strengthen over the past few quarters to 0.35 times in the third quarter of 2024, compared with 0.41 times in the preceding quarter.

This was due to the continuous effectiveness of the group’s debt management and capital allocation strategies.

Source: The Star, November 26, 2024