Glomac shares down on lower profit, RHB Research slashes profit forecasts

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KUALA LUMPUR (Dec 4): Glomac Bhd shares are down 0.95% in early morning trade following news that its profit for the second quarter ended Oct 31,2014 (2QFY15) shrank 66.4% to RM 13.17 million.

As of 10.52am, the shares had risen to RM 1.04 and remained  there. A volume of 70,700 shares were traded.

In its filing with Bursa yestarday, the property and real estate developer revealed that quarterly revenue was down almost 45% to RM 86.29 million against RM 155.8 million in the corresponding period last year.

Earnings per share fell substantially to 1.81 sen per share against 5.39 sen per share a year earlier.

Glomac said that its decline in revenue was due to the completion of the Damansara Residences and tail-end projects in Bandar Saujana Utama in Selangor.

For the six months ended Oct 31 (1HFY15), the company saw its net profit decline sharply to RM34.02 million from RM63.33 million a year ago, on lower revenue of RM192.83 million versus RM318.07 million in 1HFY14.

Following announcement of the results, RHB Research Institute said that it was slashing its FY15/FY16 net profit forecasts by 23%/16% given the expected delays in new project launches.

RHB said that it was also lowering the Revalued Net Asset Valuation (RNAV)-based target price (TP) to RM1.08 from RM1.28 after ascribing a higher discount to RNAV of 45% from 35% previously.

"This is in light of the expected challenging environment ahead and slower earnings recovery. The key risks include further delays in new launches, weaker-than-expected sales and a slower recovery in consumer sentiment," it said.