KUALA LUMPUR (Aug 20): S P Setia Bhd’s (KL:SPSETIA) net profit came in lower at RM99.8 million for the second quarter ended June 30 (2QFY2025), down 66.2% from RM295.03 million a year earlier, its Bursa Malaysia filing shows.
The year-on-year (y-o-y) drop in earnings was mainly due to lower contributions from land sales by RM407 million, as well as reduced revenue from projects in Australia and Vietnam following substantial handovers of completed developments in 2024.
The developer booked land sale revenue of RM564 million a year ago, including the land disposal in Taman Pelangi Indah 2, Johor.
Quarterly revenue shrank 36.8% y-o-y to RM943.73 million from RM1.49 billion previously. Earnings per share (EPS) was down to 1.99 sen from 6.30 sen a year ago.
On a quarter-on-quarter basis, the developer’s net profit, however, jumped 49% from RM67.02 million in 1QFY2025, while revenue grew 22.4% from RM770.70 million previously. The improvement was attributed to land sale recognition in Taman Pelangi during the quarter under review.
Gross margin widened to 40.4% from 37.3%, while operating margin narrowed to 32.9% from 39.9%. Finance costs fell 4.5% y-o-y to RM80.16 million from RM83.93 million.
No dividend was declared for the quarter under review. However, the board declared preferential dividends for its Islamic Redeemable Convertible Preference Shares, known as RCPS-i A and RCPS-i C, at annualised rates of 6.49% and 5.43% respectively, with the payment date to be announced.
For the six-month period (1HFY2025), net profit dropped 55.2% to RM166.82 million from RM372.36 million a year earlier, while revenue slid 42.3% to RM1.71 billion from RM2.97 billion.
EPS for 1HFY2025 stood at 2.52 sen compared to 7.03 sen in the previous corresponding period.
S P Setia said domestic operations accounted for RM1.42 billion or about 75% of total sales of RM1.90 billion in 1HFY2025, while international sales contributed RM480 million.
As at June 30, 2025, S P Setia had RM3.9 billion in unbilled sales, 42 ongoing projects and a landbank of 5,191 acres with an effective remaining gross development value of RM90.18 billion.
Looking ahead, the group expects the 25-basis-point Overnight Policy Rate (OPR) cut announced in July to support housing affordability, reduce developers' financing costs and potentially boost market sentiment amid heightened, prolonged global uncertainty as well as rising construction costs.
"Amid the current market challenges, our outlook remains cautiously optimistic while we look for opportunities to expand our presence across our targeted high-growth segments," president and chief executive officer Datuk Choong Kai Wai said in a separate statement.
Shares in S P Setia closed unchanged at RM1.09 sen on Wednesday, giving the group a market capitalisation of RM5.45 billion. The counter has declined more than 20% year-to-date.