Kenanga IB: SP Setia's losses widen at Battersea as RM100m profit guarantee obligations impact earnings

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Battersea Power Station News

SP Setia,Kenanga Investment Bank Bhd

KUALA LUMPUR, Aug 23 — The completion and handover of certain office towers at the Battersea Power Station (BPS) development has triggered profit guarantee obligations from SP...

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Green Day set to rock Malaysia for the first time ever in 2025 — KL second SEA stopover, third Asian dateThe completion and handover of certain office towers at the Battersea Power Station development has triggered profit guarantee obligations from SP Setia Bhd.

“SP Setia’s first half financial year 2024 earnings beat our forecast due to heavy land bank disposals. This is expected to persist up until 2H FY2024. This led us to raise our FY2024 forecast earnings by 144 per cent,” it said. There was an under-recognition of profits from land sales completed in 2Q FY2024. At the same time, consensus numbers were missed, no thanks to extended losses from Battersea, the note said.

It was reported earlier today that the Employees Provident Fund , Sime Darby Property Bhd and SP Setia are likely to incur losses of some RM250 million a quarter, or RM1 billion a year, from a five-year rental guarantee at the Battersea development.Meanwhile, SDP expects minimal future impact from the accounting adjustments related to International Financial Reporting Standards 17 despite incurring a wider share of joint venture losses due to a rental guarantee.

 

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