Glomac’s sales to pick up after slow 1QFY18

KUCHING: Glomac Bhd’s (Glomac) sales could pick up after a slow start to the financial year 2018 (FY18), driven by its pipeline projects which are expected to be launched from the second quarter of FY18 (2QFY18) onwards.

In a press statement, Glomac announced that its revenue for 1QFY18 was at RM97.5 million while its profit before tax ( PBT) was at RM6.9 million.

The research arm of Maybank Investment Bank Bhd ( Maybank IB Research) said, its 1QFY4/18 core net profit was RM2.1 million, accounting for just four of the research house’s and consensus’ full-year estimates.

“The shortfall was mainly cost-induced (revenue recognised was 20 per cent of our full-year forecast), with earnings before interest and tax ( EBIT) margin compressing by a further 0.8 percentage points ( ppt) quarter- onquarter (q- o- q) to 10.2 per cent,” it explained.

It added, the weak sales performance was also due to the lack of new launches in 3MFY4/18.

Nevertheless, it pointed out that Glomac’s net gearing remains relatively healthy at 0.27-folds in end- July 2017, from 0.21- folds in end-April 2017.

The research team also said, “Sales could however pick up in subsequent quarters, with pipeline projects worth RM810 million in gross development value (revised from RM1.14 billion) to be launched from 2QFY4/18 onwards.”

As at end- July 2017, it noted that Glomac’s unbilled sales stood at RM488 million (one-fold of our FY4/18 property revenue forecast). All in, Maybank IB Research pegged a ‘ hold’ rating on the stock.