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Glomac 1Q net profit down 32%; plans RM1b worth of launches

KUALA LUMPUR (Sept 19): Glomac Bhd's net profit dropped 31.6% to RM1.01 million in the first financial quarter ended July 31, 2018 (1QFY19) from RM1.47 million a year ago, mainly due to the completion of certain phases of Saujana KLIA in Sepang, Selangor in the previous financial year and lower construction activities during the quarter under review.

This resulted in lower earnings per share of 0.13 sen for 1QFY19 compared with 0.19 sen for 1QFY18.

Quarterly revenue also fell 40.1% to RM57.61 million from RM96.22 million a year ago.

In a filing with Bursa Malaysia today, Glomac said revenue for 1QFY19 was mainly contributed by progress billings from Bandar Saujana Utama, Sri Saujana and Saujana KLIA.

On prospects, Glomac said it is of the opinion that its performance for the financial year ending April 30, 2019 is expected to be challenging even with the planned future launches.

"The property sector is expected to remain challenging as slow wage growth and tight lending policies continue to impact sales. That being said, the group is hopeful that the strong suite of mid-market and affordable product offerings will appeal to millennial buyers which make up the largest first-homebuyer demographic," it said in a separate statement.

"The strong portfolio of potential developments with a gross development value of RM9 billion puts the group in a good position to continue offering products to the mass-market.

"The group's financial position continues to be strong as net gearing levels remain manageable. This allows the group to capitalise on any opportunities that may arise," it added.

Glomac said going forward, it targets to step up the pace of new launches so as to capitalise on the improved consumer sentiment brought about by the recent change in administration.

"Upcoming launches in FY19 totaling RM1 billion will remain in the mid-market and affordable segments while the landed residential projects in townships such as Saujana Perdana in Sungai Buloh, Selangor and Saujana Jaya in Kulai, Johor continue to sustain steady sales," it added.

The group has also secured an international retailer for Glo Damansara Mall, which is expected to increase the mall's occupancy from 45% to 85%.

"The international retailer, a major player in North Asia, will be introducing a new lifestyle concept fresh to the region. It hopes to commence its business operations by early 2019," said Glomac.

Glomac shares closed down one sen or 2.38% at 41 sen today, with 32,300 shares done, for a market capitalisation of RM324.67 million. The counter has declined 44% over the past year. — theedgemarkets.com

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