Glomac 2Q net profit down 92% on absence of government grant

KUALA LUMPUR (Nov 27): Glomac Bhd saw a 92.3% drop in second-quarter net profit mainly due to the recognition of a one-off government grant received amounting to RM26.3 million in the previous year.

The property developer's net profit for the three months ended Oct 31, 2017 (2QFY18) fell to RM1.41 million from RM18.25 million a year ago. Earnings per share also declined to 0.19 sen from 2.53 sen in 2QFY17.

Quarterly revenue, however, rose 30.9% to RM109.93 million from RM83.99 million in 2QFY17, mainly contributed by its projects such as Lakeside Residences in Puchong, Saujana KLIA in Dengkil and Saujana Perdana in Sungai Buloh.

The weak quarterly performance dragged down its net profit for the cumulative six months (6MFY18) by 96.6% to RM3.51 million from RM103.79 million, while revenue was 38.2% lower to RM207.42 million versus RM335.41 million in 6MFY17.

On prospects for the remaining financial year ending April 30, 2018 (FY18), Glomac said the environment going forward will continue to be difficult.

"Even with the planned future launches for the current financial year, the group’s performance for FY18 is expected to be challenging," it added.

In a separate statement, Glomac said FY18 earnings performance is expected to remain modest, reflecting lower property sales brought on by a more measured pace in past launches.

"Ongoing projects, predominantly terrace houses within its landed residential developments and affordable townships, are almost fully sold.

"New launches in FY18, with a collective estimated gross development value (GDV) of RM785 million, would bear the same focus, capitalizing on Glomac’s strengths in delivering quality housing at affordable prices to the mass market segment," it added.

Additionally, Glomac said it has a potential GDV of more than RM8 billion to further tap into demand in this mass market segment.

Glomac’s share price closed unchanged at 62.5 sen with 102,400 shares traded today, giving it a market capitalisation of RM451.8 million. At the current level, the group is trading at a trailing P/E of 56.5 times and has seen a 14.3% decline in its share price over the past year. — theedgemarkets.com

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