SP Setia’s Q3 profit fells on RM336mil Battersea impairmnet

KUALA LUMPUR: SP Setia Bhd posted a big loss in the third quarter of its year ending December 31 2020, bogged down by a huge impairment for its joint venture in the United Kingdom.

SP Setia said it had set aside RM336.3 million impairment for its 40 per cent-owned Battersea Project Holding Company Ltd (BPHC), pushing it to a pre-tax loss of RM219.0 million in the quarter ended September 30 2020.

Excluding the impairment, the company said it would have posted RM117.2 million pre-tax profit for the quarter.

“The shareholders of BPHC collectively resolved to recognise such impairment of its inventories under development amid the challenges presented by the Covid-19 pandemic and specifically the impact on the delivery of the Battersea Power Station project in London.

“Excluding the aforesaid impairment, the group would have a profit before tax of RM117.2 million (for Q3) and profit before tax of RM201.3 million for the year-to-date,’ SP Setia said in a statement on Friday.

It added that the impairment did not have any impact on its cash flow position.

SP Setia recorded a revenue of RM1.08 billion during the quarter.

Group revenue for the nine months stood at RM2.11 billion, while pre-tax loss was RM277.4 million.

SP Setia noted that for the nine months, it had secured total sales of RM2.26 billion.

Local projects contributed RM1.85 billion or 82% of the sales while the remaining RM410.0 million were contributed largely by international projects such as UNO Melbourne, Sapphire by the Gardens and Marque Residences in Australia as well as Daintree Residence in Singapore.

“We are heartened that as at October 31, 2020, our sales and secured bookings stood at RM2.86 billion and RM1.67 billion respectively. Many potential buyers realised the importance of owning a home that complements their lifestyle and needs under the new norm,” said president and chief executive officer Datuk Khor Chap Jen.

Khor said its key focus for the next 2 months would be on the swift conversion of thee bookings into sales.

“We believe we have a fair chance to achieve our sales target of RM3.80 billion set for this financial year,” he added.

SP Setia welcomes the 2021 Budget measures to help the property sector, including the full stamp duty exemptions on both instruments of transfer and loan agreement for the purchase of property worth up to RM500,000 by first-time buyers.

“The exemption will help to encourage sales to first-time homebuyers. Waiving of this duty is a good move to help boost the interest as it lessens the affordability gap for first-time homebuyers,” Khor said.

Source: NST