Glomac says Q3 profit tumbled as real estate development business hit by MCO

KUALA LUMPUR (March 29): Property developer Glomac Bhd said its profits for the third quarter ended January 31, 2022 (3QFY22) fell as revenue was hit by the movement control order (MCO) and a weaker market sentiment.

The group said net profit fell 32.54% to RM8.12 million from RM12.04 million in 3QFY21, while revenue fell 17.82% to RM81.67 million. against RM99.39 million.

On a quarterly basis, net profit decreased by 29.51% from RM11.52 million in 2QFY22, despite revenue increasing by 8.33% from RM75.39 million.

For the cumulative nine-month period ended January 31, 2022, Glomac’s net profit decreased by 6.29% to RM21.37 million from RM22.81 million in the same period a year earlier, while revenue decreased by 25.9% to RM185.9 million from RM250. 87 million.

Glomac said property development segment revenue declined primarily due to restricted physical construction work for ongoing project phases during MCO, which impacted the progress of construction work.

“Nevertheless, new launches and ongoing phases such as Saujana Perdana located in Bandar Saujana Utama, Plaza @ Kelana Jaya, 121 Residences, Lakeside Boulevard and Sri Saujana in Johor contributed to the revenues for the period,” the group said in a scholarship file.

Regarding its real estate investment segment, which primarily includes parking lot rentals and shopping center rental income, Glomac said quarterly and year-to-date revenues were down 6% and 23%. respectively compared to the previous corresponding periods.

“Revenues from this segment were challenging as the industry was impacted by Covid-19 and various phases of MCO,” he said.

In a separate statement, Glomac said the group’s near-term goal is to further boost sales of its ongoing projects as well as upcoming new launches.

“At the same time, Glomac will continue to take steps to strengthen its online presence and digitization process to improve its sales and marketing strategies.

“The reopening of the economy has been very well received and has boosted consumer optimism. Nonetheless, challenges remain with global geopolitical issues and growth risks that could weigh on our domestic economic recovery and impact the market sentiment,” he said.

Looking ahead, Glomac said it is well positioned to accelerate its launches and introduce new development products when market conditions are more favorable.

“The group’s balance sheet remains healthy and it can potentially tap into its strong portfolio of prime development land with an estimated potential gross development value of RM8 billion to further fuel its development activities,” he said. added.

Glomac’s share price stood for the day at 1.56% or half a sen above 32.5 sen, giving the group a market capitalization of RM249.62 million.

Sara H. Byrd