Glomac’s 2Q19 earnings jump to RM5.6m

The revenue increase mainly derives from the property development segment and overall administrative cost savings

by SHAZNI ONG/ pic credit: glomac.com.my

GLOMAC Bhd’s net profit jumped 426% to RM5.59 million in the second quarter ended Oct 31, 2019 (2Q19), from RM1.06 million a year earlier, helped by more ongoing development phases, a better performance by the property investment segment and overall administrative cost savings.

Earnings per share for the three months in focus rose to 0.72 sen compared to 0.13 sen recorded in the same period last year.

The 2Q19 revenue increased 10.3% year-on-year to RM61.51 million from RM55.76 million previously, mainly derived from the property development segment, the group said in a Bursa filing yesterday.

The group’s cash position stood at RM201.2 million as of Oct 31, 2019, while net gearing improved to 0.26 time against shareholders’ funds of RM1.1 billion.

In a separate statement, Glomac said revenue was largely derived from Saujana Perdana and Saujana KLIA, Selangor, and Sri Saujana in Johor.

“New project phases such as [email protected] Jaya, Saujana Jaya in Johor, Saujana Rawang and Lakeside Boulevard shop offices in Puchong, Selangor, have also started contributing,” it said.

The better performance was underscored by the developer’s products, which are targeted at the affordable and mid-market segments.

The group’s high-rise residential projects were also well-received, including the RM347 million [email protected] Jaya serviced apartments, of which 87% of the residential units have been sold since its official launch.

Tower A of the RM321 million 121 Residences, which comprises two towers of serviced apartments and SoHo units in the Petaling Jaya-Damansara district, has also seen a take-up rate of 90% since its launch in September 2019.

Revenue from the property investment segment was mainly driven by better occupancy rates at the Glo Damansara mall, underpinned by carpark rental and mall rental income.

The developer expects to sustain its sales momentum, driven by continuing sales from ongoing projects, as well as new launches of terrace houses and townhouses in the second half of the financial year ending April 30, 2020.

“Emphasis will be on driving sales from high-rise residential projects such as [email protected] Jaya and 121 Residences,” it added.

For the remaining period to the end of the financial year, the group said the property market is likely to remain challenging.

The group will continue to strategise in introducing suitable products that will appeal to its market segments, while maintaining a development portfolio with a potential estimated gross development value of RM8 billion to “accelerate its development activities when market conditions improve”.

Shares of Glomac closed 1.4% or half a sen higher at 36 sen yesterday, valuing the company at RM292.03 million.