Glomac’s 1Q earnings hit by MCO

by SHAHEERA AZNAM SHAH / Source: glomac.com.my

GLOMAC Bhd stated that the suspension of its operations during the Movement Control Order (MCO) period saw its earnings fall 20% year-on-year (YoY) to RM2.78 million in its first quarter ended July 2020 (1Q21).

The loss was offset by cost savings from the construction for Saujana KLIA in Sepang, which resulted in improved margins and profitability during the quarter, the company noted in a release yesterday.

Revenue for the quarter declined 9.63% YoY to RM46.87 million which was derived mainly from its ongoing developments at Saujana Perdana, Saujana Rawang and Plaza @ Kelana Jaya.

Revenue from its property development segment in the quarter declined 8% YoY to RM40.86 million due to the completion of certain phases at Saujana KLIA, coupled with the suspension of physical construction work during the MCO.

Revenue from Glomac’s property investment segment, which mainly comprised of car park rental and mall rental, decreased by 23% YoY to RM6.12 million due to the lesser income generated at its car park operations during various phases of the MCO.

As of July 31, 2020, Glomac’s balance sheet remained healthy with a cash position of RM171.2 million, while its net gearing remained low at 0.28 times against shareholders’ funds of RM1.1 billion.

Glomac said new sales doubled during the quarter to RM50 million compared to 1Q20, driven by the sustained demand for residential properties at Saujana Perdana in Sungai Buloh and serviced apartments at 121 Residences.

“This strong sales performance despite the MCO drove unbilled sales to RM660 million.

“The commendable sales performance during 1Q21 was achieved due to the favourable product mix and strength of Glomac’s development projects and a keen emphasis on digital marketing strategies,” it said.

Moving forward, Glomac said its sales and financial performances are expected to be backed by unbilled sales of RM660 million and the resumption of construction activities post-MCO.

The group plans to launch more new projects in FY21 comprising mid-market and affordable landed residential projects at Saujana Perdana, Saujana KLIA and Saujana Jaya in Johor.

“Glomac will also continue to pace its new launches strategically, leveraging a strong development portfolio with a potential estimated gross development value of RM8 billion that will sustain the group for the coming years,” it stated.