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Friday, March 28, 2008

SP Setia posts RM48.5m profit

PETALING JAYA: SP Setia Bhd posted net profit of RM48.52mil for the first quarter ended Jan 31, up 3.8% from RM46.76mil in the previous corresponding period, boosted by its property development in the Klang Valley, Johor Baru and Penang.

In a statement to Bursa Malaysia yesterday, the company said revenue rose 19% to RM303.65mil from RM255.21mil. Earnings per share was 4.81 sen compared with 4.56 sen before.

Apart from property development, the group’s construction and wood-based manufacturing activities contributed to its earnings.

SP Setia said its focus for the current financial year was to transform itself from being largely a Malaysian developer of residential homes to a fully integrated regional real estate developer.

Commenting on its first integrated commercial project, Setia Walk in Pusat Bandar Puchong, the company said sales had been encouraging.

On its overseas ventures, SP Setia said it targeted to launch its first overseas project in Vietnam by July.

Meanwhile, Reuters reported that SP Setia expects to double 2007 earnings within four years and predicts that its Vietnamese business will turn a profit by 2009.

Speaking on the sidelines of an investor conference, SP Setia chief executive officer Tan Sri Liew Kee Sin said he expected sales to rise by 56% to RM1.8bil this year from last, beating the average forecast of RM1.3bil by 14 analysts polled by Reuters Estimates.

Liew Kee Sin

“We are saying that by 2012 we will double our profit but it won’t be a smooth ride. By 2012, I want our overseas business to contribute at least 30% of profit. By 2009 Vietnam will start to contribute to profit.”

Liew, who owns 12% of the company’s shares and travels to Vietnam once a week to oversee SP Setia’s expansion there, also said its domestic business was on track and investor concern over delays of project launches was unjustified.

SP Setia shares have lost 27% of their value since the start of the year due to poor investor sentiment resulting from political uncertainty and the global financial crisis, valuing the company at US$1.2bil.

They have underperformed the stock market, which has dropped 14% in the same period.

SP Setia owns 1,900ha worth RM30bil. Less than 10% of its land is earmarked for commercial property.

By The Star

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