Glomac’s 3QFY14 net profit drops 10.5%

KUALA LUMPUR: Glomac Bhd’s net profit for the third quarter ended Jan 31 of financial year 2014 (3QFY14) dropped 10.5% to RM22.71 million from RM25.36 million in the previous corresponding quarter. However, revenue rose 15% to RM183.72 million.

Glomac attributed the higher quarterly revenue to continued contribution by projects in Puchong Lakeside Residences, Saujana Rawang and Cyberjaya 2.

The lower net profit was due to higher premium rates for land conversion and higher construction costs.

Cost of sales increased by 18.5% to RM132.4 million in the quarter under review. Marketing and administration expenses also jumped 74.4% and 25.5% respectively.

For the nine months to Jan 31 (9MFY14), Glomac’s net profit rose 22.4% to RM86 million, on a 12.7% increase in revenue to RM501.8 million.

Subsequently, cumulative net earnings per share also stood higher at 11.9 sen compared with 10.29 sen in the previous corresponding period.

Glomac has proposed a lower single-tier interim dividend of 2.25 sen per share this year, compared with three sen earlier.

“New sales have been encouraging, driven by our strategic decision to focus on more resilient landed residential projects in the current softer market environment,” the company in a statement yesterday.

Glomac achieved new sales of RM368 million in 9MFY14. It said it had unbilled sales of RM792 million as at end-January this year. It also has available gross development value (GDV) of RM7 billion on prime and strategic landbank within greater Kuala Lumpur to further capitalise on demand for landed residential developments.

“Continuing with our emphasis on landed residential projects, we expect to launch new phases from the RM2.6 billion GDV Lakeside Residences in Puchong in the second half of 2014,” Glomac said, adding that initial phases comprising link houses with GDV of RM229 million are almost all sold.

Glomac said it also plans to launch Saujana KLIA, its new township with a total GDV of RM1.2 billion, this calendar year.

“Going forward, the property market is challenging with the higher premium rates for land conversion and construction costs,” said Glomac.

“Barring any unforeseen circumstances, the directors are of the opinion that based on the ongoing development projects and the level of work targeted to be completed, the group’s performance for the financial year ending April 30, 2014 is expected to improve.”

This article first appeared in The Edge Financial Daily, on March 20, 2014.


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