KUALA LUMPUR, Aug 13 — SP Setia Bhd’s recorded a net loss of RM141.54 million in the second quarter (Q2) ended June 30, 2020 compared with a net profit of RM114.07 million in the corresponding quarter last year.
Its revenue for the quarter under review also decreased to RM331.32 million from RM1.33 billion in the same quarter in 2019, due to challenges by the Covid-19 pandemic and the resultant movement control order (MCO) and conditional movement control order (CMCO).
“The group had resolved to aggressively reprice the inventories at Setia Sky 88 project in Johor Baru and Setia Sky Vista project in Penang, which had been completed for some time, to expedite its clearance and to conserve cash flow.
“As a result, the group had to account for an unprecedented amount of impairment of completed inventories of RM145.9 million in Q2 2020.
“All projects came to a standstill during the MCO and CMCO period, which spanned almost the entire Q2 2020. This had significantly impeded revenue recognition during the quarter under review” it said in a filing with Bursa Malaysia today.
The group also said for comparison purposes, in the corresponding Q2 2019 period, it had completed the sale of its British Embassy land in Jalan Ampang, Kuala Lumpur for RM449.2 million, which came in as an irregular revenue in that quarter.
In a separate statement, president and chief executive officer Datuk Khor Chap Jen said the group had secured bookings of RM1.42 billion, as at July 2020.
“The main focus will now be on the swift conversion of these bookings into sales. Since the MCO and subsequent recovery movement control order (RMCO) were imposed to contain the Covid-19 pandemic, activity in terms of new launches and transactions has generally been slower in the residential market.
“More emphasis was placed on clearing of inventories and the careful rationalisation of launches,” he said.
On prospects, the group secured sales of RM875 million during the first half of the financial year 2020 despite the unprecedented challenging operating environment.
Local projects contributed RM702 million or approximately 80 per cent of the sales whilst the remaining RM173 million or approximately 20 per cent 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.
On the domestic front, sales were mainly from the central region with RM502 million, aided by RM127 million contribution from the southern region while the northern region contributed another RM73 million. — Bernama
