Greetings, fellow investors and property enthusiasts! Today, we’re diving deep into the latest financial pulse of one of Malaysia’s leading property developers, S P Setia Berhad, as they unveil their unaudited interim financial report for the first quarter ended 31 March 2025. This report offers a comprehensive look at the company’s performance, strategic direction, and financial health. While the quarter presented its share of challenges, S P Setia continues to lay a strong foundation for future growth, backed by significant land banks and ambitious plans. Let’s break down the key takeaways that every Malaysian retail investor should know.
Q1 2025 Financial Highlights: A Mixed Picture
S P Setia’s first quarter results show a notable shift compared to the same period last year. While revenue and profit before tax saw a decline, it’s crucial to understand the underlying factors and the company’s strategic responses.
Q1 2025 Performance
Revenue: RM770.7 million
Profit Before Tax (PBT): RM141.5 million
Profit for the Period: RM89.4 million
Basic Earnings Per Share: 0.52 sen
Diluted Earnings Per Share: 0.50 sen
Compared to Q1 2024
Revenue: RM1,476.0 million (47.8% decrease)
Profit Before Tax (PBT): RM181.2 million (21.9% decrease)
Profit for the Period: RM93.9 million (4.8% decrease)
Basic Earnings Per Share: 0.56 sen (7.1% decrease)
Diluted Earnings Per Share: 0.47 sen (6.4% increase)
The reported revenue of RM770.7 million for Q1 2025 represents a significant decrease of 47.8% compared to RM1,476.0 million in Q1 2024. Consequently, Profit Before Tax (PBT) also saw a 21.9% dip to RM141.5 million from RM181.2 million in the previous year’s corresponding quarter. This decline is primarily attributed to lower revenue from land sales and reduced contributions from international projects in Australia and Vietnam, following substantial project handovers completed in 2024. Domestic property development revenue also experienced a moderation.
However, it’s worth noting that while basic earnings per share declined, diluted earnings per share actually saw a slight increase, indicating the impact of share conversions.
Segmental Performance: Property Development and Investment Holding
Delving deeper into the business units:
- Property Development: This segment, the Group’s core business, generated RM719 million in revenue and RM133 million in PBT for Q1 2025. This marks a 49% and 26% decrease in revenue and PBT respectively, year-on-year. The lower figures are consistent with the overall Group performance, reflecting reduced land sales and the completion effect of overseas projects.
- Investment Holding and Others: This segment, which includes trading and investment properties like office towers, retail malls, convention centres, and hotels, showed an improved PBT for Q1 2025 compared to Q1 2024. This positive trend is mainly due to higher contributions from the Group’s investment properties and hotel operations, showcasing diversification benefits.
Financial Health Check: Stability Amidst Shifts
A look at the balance sheet provides insight into S P Setia’s financial standing:
| Balance Sheet Item | As At 31 March 2025 (RM’000) | As At 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 27,312,364 | 27,603,810 |
| Total Equity | 15,775,354 | 15,843,751 |
| Net Assets per Share | 2.64 | 2.66 |
The Group’s total assets and total equity remained largely stable with a slight decrease compared to the end of the last financial year, reflecting ongoing business operations and financial adjustments. Net assets per share also saw a minor dip from RM2.66 to RM2.64.
From a cash flow perspective, net cash generated from operating activities for Q1 2025 was RM189.0 million, a significant decrease from RM890.4 million in Q1 2024. This indicates a lower cash conversion from operations during the quarter. However, the Group’s cash and bank balances at the end of the period stood strong at RM2.55 billion, contributing to a healthy cash and cash equivalents position of RM2.81 billion.
Prospects and Strategies: Navigating the Future
Despite the challenging quarter, S P Setia has a clear roadmap for the current financial year and beyond.
Q1 FY2025 Sales Performance
The Group secured sales of RM718 million for Q1 FY2025. Local projects were the primary drivers, contributing RM489 million (approximately 68% of sales), with strong performance from the Central (RM284 million) and Southern (RM189 million) regions. International projects added RM229 million (approximately 32%) to the sales tally.
Market Outlook and Strategic Response
Bank Negara Malaysia has maintained its 2025 Gross Domestic Product (GDP) growth forecast between 4.5% to 5.5%. S P Setia acknowledges the fluctuating market challenges and emphasizes its vigilance in monitoring developments, assessing potential impacts, and evaluating appropriate strategies to mitigate any adverse effects.
Ambitious Plans Ahead
The Group is set to launch RM5.1 billion worth of property development projects and RM300 million in industrial planned launches in FY2025. Their strategy involves accelerating catalytic township developments, expanding eco-industrial parks, forging strategic partnerships, monetizing land assets, and capitalizing on value creation across key growth corridors.
S P Setia remains steadfast in its commitment to achieve its RM4.8 billion sales target for the year, leveraging its established reputation as a leading sustainable, master-planned township developer in Malaysia.
International Expansion
On the international front, the recently launched ATLAS Melbourne project, with an estimated Gross Development Value (GDV) of AUD 886.7 million (approximately RM2.7 billion), is showing continued momentum in contributing to the Group’s overall sales. In Vietnam, new residential launches are scheduled within the successful EcoLakes developments in FY2025.
As of 31 March 2025, the Group boasts a robust unbilled sales pipeline of RM3.8 billion, 42 ongoing projects, a remaining land bank of 5,364 acres, and an impressive effective remaining GDV of RM120.1 billion. These figures underscore the Group’s long-term revenue visibility and development potential.
Dividends: Rewarding Shareholders
While no interim dividend was declared for the financial period ended 31 March 2025, S P Setia did announce and pay dividends related to the financial year ended 31 December 2024. A single-tier dividend of 2.88 sen per ordinary share, amounting to RM144.1 million, was paid on 15 April 2025. Additionally, preferential dividends for Islamic Redeemable Convertible Preference Shares (RCPS-i A and RCPS-i C) totaling RM40.9 million were also paid on the same date.
Summary and
S P Setia’s Q1 2025 report reflects a period of adjustment, with lower revenue and profit compared to a strong prior-year quarter, largely due to fewer land sales and the natural cycle of international project handovers. However, the Group’s strategic outlook remains positive, underpinned by a significant land bank, a healthy unbilled sales pipeline, and a clear focus on new launches and diversification. Their commitment to the RM4.8 billion sales target for FY2025 demonstrates confidence in their established market position and strategic initiatives. While the financial performance in this quarter presents a mixed picture, the company’s underlying assets and forward-looking strategies suggest resilience.
Key points to consider from this report include:
- Lower revenue and profit in Q1 2025, primarily due to reduced land sales and international project contributions.
- A significant decrease in net cash generated from operating activities compared to the previous year, which warrants close monitoring.
- The presence of ongoing material litigations, which are being managed, but could present future uncertainties.
- The company’s vigilance amidst fluctuating market challenges, indicating a proactive approach to risk management.
As a seasoned observer of the Malaysian property sector, I see S P Setia navigating a dynamic environment. The slowdown in Q1, while impactful on headline numbers, seems to be a function of specific project cycles rather than a fundamental weakening of their core business. The robust land bank and ambitious launch plans for FY2025 are strong indicators of their long-term potential. The focus on catalytic townships and eco-industrial parks aligns well with evolving market demands.
Do you believe S P Setia can navigate these market headwinds and achieve its ambitious sales target for FY2025? Share your thoughts and insights in the comments section below! Your perspective is valuable as we collectively analyze the journey of Malaysian companies.
