Glomac’s 3Q net profit jumps on property sales

By NUR HANANI AZMAN / Pic TMR

GLOMAC Bhd’s earnings jumped 747.8% year-on-year (YoY) to RM12.1 million in the third quarter ended April 30, 2020 (3Q20), due to ongoing development phases and stronger performance by the property investment segment, complemented by overall administrative cost savings.

Earnings per share for the three months rose to 1.56 sen.

Revenue for the period fell 6.3% YoY to RM74 million with the bulk of that deriving from the property development segment, the group said in an exchange filing yesterday.

“Revenue contribution was largely driven by several key ongoing projects, namely Saujana Perdana at Bandar Saujana Utama, Plaza @ Kelana Jaya, Saujana KLIA and Saujana Rawang,” it said.

Glomac said the significant improvement in profitability in the period was due to contribution from higher-margin projects and better performance by the property investment segment.

Profitability was further enhanced by overall administrative cost savings during the period under review.

For the cumulative nine-month period (9M20), Glomac achieved revenue of RM187.4 million as profits grew significantly to RM21.2 million versus RM3.5 million profit made in 9M19.

As at Jan 31, 2020, Glomac’s balance sheet remained robust with a cash position of RM172.5 million and net

gearing at 0.28 times against its shareholders’ funds of RM1.1 billion. The sequentially stronger financial performance was achieved due to the favourable product mix and strength of Glomac’s development products, which are strategically targeted at the affordable and mid-market segments, the property developer said.

Ongoing phases in Glomac’s development projects, such as Lakeside Residences in Puchong and Saujana Perdana in Sungai Buloh, both in Selangor, have continued to be well taken up.

Glomac’s high-rise residential product offerings were launched with much success as well, the company added.

Plaza @ Kelana Jaya is an integrated freehold residential project with a gross development value (GDV) of RM347 million. As at Jan 31, 2020, 75% of its residential units were sold.

Continuing from the success of Plaza @ Kelana Jaya, Selangor, the recently launched 121 Residences comprises two towers of serviced apartments and SoHo units in the Petaling Jaya-Damansara district bearing a total GDV of RM321 million.

The project has a take-up rate of 64%, Glomac said. The group’s performance is expected to sustain, backed by unbilled sales that surged to RM626 million driven by continuing sales from ongoing high-rise residential projects such as [email protected] Kelana Jaya and 121 Residences.

Glomac said the domestic property market is likely to remain challenging and adversely impacted by Covid-19 and Movement Control Order.

It said notwithstanding the above, Glomac has taken certain steps and will be taking further steps to circumvent and mitigate the challenges.

“The group will continue to strategise in introducing suitable products that will appeal to its market segments. Longer-term, Glomac commands a strong development portfolio with a potential estimated GDV of RM8 billion to accelerate its development activities when market conditions improve,” it added.

Shares of Glomac closed 3.5% or one sen lower at 28 sen yesterday, valuing the company at RM220.02 million.