Glomac to record lower than expected results

KUALA LUMPUR: Glomac Bhd’s (Glomac) first quarter of financial year 2017 (1QFY17) results will likely come below expectations with weaker core net profit quarter-on-quarter (q-o-q) and year-on-year (y-o-y), the research arm of Maybank Investment Bank Bhd (Maybank IB Ressearch) believed.

Maybank IB Research noted that excluding a disposal gain of RM80 to 84 million owing to the land sale in Cheras(announced in October 2015),1QFY17 core net profit could come in at RM5 to 10 million (down 53 per cent to minus 76 per cent yo-y, minus 54 per cent to minus 77 per cent q-o-q) accounting for just seven to 15 per cent of the research arm’s full-year estimate.

It further noted that the weakerthan-expected earnings performance could be due to weaker sales (down 40 per cent y-o-y in FY16), slower progress billing and higher marketing expenses.

“After slow sales recorded in FY16, Glomac plans to intensify its property launches from 2QFY17 onwards and has lined up RM982 million worth of new launches,” Maybank IB Research said.

The research arm highlighted that most of these new launches are township and landed property projects except for Plaza Kelana Jaya 4 (RM344 million in gross development value (GDV)), which offers service apartments and shop offices.

“We are less sanguine on Plaza Kelana Jaya 4 in view of the huge incoming supply of high-rise in the Klang Valley,” it said.