SUSTAINABLE EARNINGS: (From left) Glomac managing director and chief executive officer Datuk Fateh Iskandar, group executive chairman Tan Sri Mohamed Mansor Fateh and group executive vice chairman Datuk Richard Fong Loong Tuck during the company’s AGM yesterday. The group is confident of sustainable earnings despite global economic headwinds and was looking ahead to better times.
KUALA LUMPUR: Glomac Bhd (Glomac) is well-positioned to capitalise on the stable property outlook and aims to maximise opportunities by monitoring the quantum and timing of future launches to match market demand.
Its group managing director and chief executive officer Datuk FD Iskandar Tan Sri Mohamed Mansor said Glomac was confident of sustaining earnings despite the economic headwinds and was looking ahead to better times with more projects as well as a bigger landbank in the Greater Kuala Lumpur area.
“Our recent land acquisitions in Puchong, Sungai Buloh and Dengkil have expanded our landbank to a comfortable 591 acres more, with an extimated gross development value (GDV) of RM3.6 billion. This GDV will be the source of growth going forward,” he said during the press conference held here yesterday.
Anchored by available GDV of approximately RM7 billion, including available units at on-going projects plus RM5.6 billion worth of new projects, the group’s total launches for the current financial year were targeted to hit over RM1 billion in GDV.
Coupled with that, its record high unbilled sales of RM763 million as of the first quarter (1Q) of FY2013 assured its steady growth for the next 18 months, which led to Glomac doubling in profits every two years since FY09.
It recorded profit after tax and minority interests (PATMI) of RM85.2 million in FY2012 and profit before tax (PBT) of RM161.1 million during the same period
“At the same time our balance sheet has never been stronger, providing us healthy resources for further land acquisitions. We are poised and ready to act should opportunities crop up at the right price, especially in the Greater Kuala Lumpur area where we have build a strong branding,” said FD Iskandar.
According to its 2012 Annual Report, property development continued to be the main driver of earnings for the group recording 98.1 per cent of the total turnover in FY2012.
Its total sales of RM663.3 million achieved in FY2012 were 32.7 per cent higher than its internal target of RM500 million, mainly driven by the successful launch of Reflection Residences @ Mutiara Damansara, Glomac Damansara Residences and the Saujana Utama and Saujana Rawang townships.
These projects had provided a solid and resilient earnings base for the group and contributed total sales of over RM500 million during the year under review, with additional sales from Glomac Centro as well as its commercial development Glomac Cyberjaya 2 making up the rest.
Currently, three of its projects, namely Glomac Centro, Reflection Residences and Glomac Damansara, are set to have close proximity to planned MRT stations.
Beyond its current offerings, Glomac had also lined up a series of new projects targeted to launch within next year.
“These will focus more on residential township developments as for the last six months the residential market has remained the strongest segment in the property sector, and has consistently overtaken the demand for commercial properties since 2011,” FD Iskandar highlighted.
“We are targeting to unveil four new developments together with the on-going development with a combined GDV in excess of RM5 billion and I believe these will spearhead Glomac into its next phase of growth,” he added.
Among it would be Plaza Kelana Jaya Phase 4 with GDV of RM240 million, development of Lakeside Residences at Puchong with a potential GDV of RM2 billion as well as the Sungai Buloh and Dengkil township projects which were expected to be launched in 2014, with a potential GDV of RM800 million each.
The Lakeside Residences potential GDV of RM2 billion would be the group’s single largest project and would surpass its present GDV of RM1.46 billion.
On top of that, Glomac is also the highest dividend paying company in the property sector in Malaysia, with dividend yields going as high as 6.9 per cent. Its total dividend declared for the current financial year amounted to 5.5 sen.
In conclusion, FD Iskandar hinted that Glomac would be acquiring more landbanks towards year-end and he aimed to sustain dividend payment equivalent to at least FY12’s 5.5 sen per share or more.