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Friday, December 11, 2009

SP Setia full-year net profit drops to RM171m

Malaysia's biggest property developer SP Setia Bhd said net profit for the full year to October 31 2009 fell by a fifth to RM171.2 million, despite hitting record sales.

The company is however confident of returning to net profit growth this fiscal year, helped by new launches and its new "Best of the Best" campaign to boost home sales.

President and chief executive officer Tan Sri Liew Kee Sin expects sales this year to be better than the record RM1.65 billion it achieved in the year just ended.

The new campaign, launched in October, is proving to be popular and has already helped it pull in RM300 million in November, its best monthly sales ever, he said.

Net profit had dropped in the last fiscal year due to the company having to bear costs from its previous 5/95 home loan campaign, as well as higher constructions costs.
The company is actively looking to buy more landbank in the Klang Valley, Penang and Johor, Liew said.

"I think the Malaysian market is very strong, so we'll focus strongly on Malaysia," he said, adding that it would expand in a bigger way in China and Vietnam in five years' time.

It may sell its two Tesco hypermarkets in Setia Alam (Shah Alam) and Johor this fiscal year to obtain funds for land purchases, he said.

Analyst Ong Chee Ting of Maybank Investment Bank raised SP Setia's stock to "buy" from "sell" yesterday on the back of its improving prospects and inexpensive valuation. The company still has unbilled sales of RM1.5 billion, he noted.

SP Setia's revenue for the year just ended fell by 4.3 per cent to RM1.41 billion. Net profit for the fourth quarter fell by 25 per cent to RM56.8 million, while revenue slid 36 per cent to RM293.4 million.

By Business Times (by Adeline Paul Raj)

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