Glomac Berhad reported its 1QFY25 earnings to be within expectations, with core net income of RM7.28 million making up 34% of the full-year forecast. The company's performance was mainly driven by the sale of completed properties, particularly the Suria Stonor project. Despite the earnings boost, MIDF Stock Broking House have maintained a NEUTRAL stance on Glomac with a revised target price of RM0.39, down from RM0.43, due to weaker new sales and limited upside potential.

In the first quarter, Glomac recorded a return to profitability with a core net profit of RM7.28 million, compared to a net loss of RM1.8 million in the preceding quarter. This turnaround was largely supported by the sale of Suria Stonor, which also contributed to a 19.2% quarter-on-quarter increase in topline growth. Additionally, a 37% reduction in finance costs further bolstered earnings. On a yearly basis, core net income rose by 79%, again mainly attributed to the completed sale of Suria Stonor. Glomac's balance sheet remains healthy, with a low net gearing ratio of 0.06x, reflecting strong financial stability.

However, the company faced weaker new sales in 1QFY25, with total sales reaching only RM20 million, a significant drop from the RM218 million recorded in 4QFY24. Of the new sales, RM12 million came from Suria Stonor. The slowdown in sales was anticipated, as Glomac has scheduled its major launches for the second quarter of the financial year.

The company has plans to roll out RM450 million worth of new projects in 2HFY25, which is expected to improve sales performance in the latter half of the year. Meanwhile, unbilled sales dropped to RM388 million in 1QFY25, down from RM504 million in the previous quarter, providing more than a year of earnings visibility.

Source: MIDF
Title: Earnings Driven by Sale of Completed Properties