Glomac's 9MFY24 results dragged by lower margins

KUCHING: Glomac Bhd's (Glomac) first nine months of financial year 2024 (9MFY24) core net income (CNI) has come in lower at RM8.93 million as earnings were dragged by lower margins realised during the group's FY24 period.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the group's 9MFY24 revenue had shrunk 2.2 per cent year on year (y-o-y) but its CNI had contracted at a wider 48.9 per cent y-o-y.

The lower earnings were largely due to the group's gross profit margin falling from 31 per cent in 9MFY23 to 25 per cent in 9MFY24.

“Besides, earnings decline was also partly a to higher financing costs due to increase in interest rate,” it added.

Overall, the 9MFY24 results made up only 60 per cent of MIDF Research's full-year FY24 earnings forecast for Glomac.

Despite this, they still deemed to results to be within expectations as they expect stronger earnings in 4Q as the group's progress billings are expected to pick-up.

Additionally, the research arm is anticipating Glomac's new sales momentum to pick up in 4QFY24 on the back of the launches of Allamanda at Saujana KLIA and Keys at Lakeside Residences. Both have a combined gross development value of RM234 million.

“In addition, the upcoming launch of Loop City Residences which has a GDV ofRM338 million should support new sales momentum beyond FY25,” they added.

Glomac recorded RM142 million worth of new sales in 9mFY24, with the bulk of it stemming from new sales at its Lakeside Residences and 121 Residences.

Looking at the developer's latest quarter, 3QFY24, it was noted that its revenue had grown 60.1 per cent quarter on quarter (q-o-q) RM89.35 million, while its CNI grew by 795.7 per cent q-o-q to RM4.33 million.

“The jump in earnings was due to low base in 2QFY24 which dragged by earnings recognition from lower margin projects namely Seri Kenanga RSKU at Saujana Utama.

“The higher earnings recognition from projects offset the higher marketing and administrative expenses,” MIDF Research explained.