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Friday, December 28, 2007

Glomac set to rebound after three years of decline

PETALING JAYA: Analysts expect Glomac Bhd’s net earnings to rebound in the current financial year ending April 30, 2008, thanks to higher development profit and land sales, after three straight years of decline.

A Singapore-based brokerage said the growth was underpinned by “record unbilled sales and strong demand for its products.”

For the first six months ended Oct 30, Glomac’s new sales figure rose to RM141mil, or 24% higher compared with the previous corresponding period.

This lifted its total unbilled sales value to a record RM336mil. The amount excludes the group’s 51% stake in Glomac Tower, a grade A office tower near KLCC, which was sold for RM577mil on an en bloc basis.

Meanwhile, its Suria Stonor project, which has a take-up rate of 89%, was on track for completion in April. The company is now marketing the remaining nine condominium units at RM1,300 psf, up from RM650 psf two years ago.

The company is also targeting to launch the Glomac Damansara and Glomac Galleria in Sri Hartamas in the first quarter of next year.

The brokerage noted that Glomac’s balance sheet was healthier with the completion of a recent fund-raising exercise.

In October, Glomac sold 67.3 million new rights shares at RM1.10 each together with 67.3 million detachable free warrants to raise RM72mil.

“With the improved financial capacity, the group is actively looking at parcels of prime lands in the Klang Valley,” it said, adding that Glomac was also exploring other opportunities, such as formation of a real estate investment trust.

Glomac reported a net profit of RM21.28mil, or 9.27 sen per share, for its first half, compared with a net profit of RM8.38mil, or 3.77 sen per share, in the previous corresponding period.

Consensus estimates projected the group’s full-year net profit would be just shy of RM40mil.

In a recent update, a local investment bank said while Glomac’s first-half performance was boosted by a one-off profit from land sales, it expected the second half to be stronger on seasonal demand and rising progress billings from on-going projects.

By The Star (by Izwan Idris)

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