KUALA LUMPUR (July 28): With the rise in Covid-19 cases continuing unabated, Glomac Bhd said the property market may only bottom out next year, provided the country can hit its herd immunity target this year.
“While the country’s vaccination's progress has been implemented at a faster pace, the daily figures for Covid-19 infections are still very high,” said Glomac group managing director and CEO Datuk Seri Fateh Iskandar Mohamed Mansor.
“So, I would say between six and 12 months after most people have been vaccinated, then only can we see an uptick in economic activities. In turn, the property market will also pick up eventually,” Fateh Iskandar told a virtual press conference on Glomac’s financial results.
Against the backdrop of the ongoing movement control order (MCO), Fateh Iskandar is cautious on the group’s growth prospects for the financial year ending April 30, 2022 (FY22).
But he is hopeful that the group can achieve higher new property sales compared with FY21, as it is well placed to pursue development activities when the economy normalises and buyers return to the market.
He added that the group is banking on landed properties to drive property sales, as demand for landed houses remains good, given the take up rate for its past-launched landed houses was above 90%. Given that, he said the majority or 75% of the group's FY22 new launches worth RM282 million are terrace houses.
In addition to new sales, the group’s prospects will be backed by a sustainable level of unbilled sales of RM578 million, he said.
For FY21, Glomac achieved sales of RM231 million, despite having launched only RM195 million worth of new products — significantly lower than its new launches of RM378 million in FY20 — as it has scaled down significantly from its planned launches of RM403 million for the year, after taking lockdown restrictions into consideration.
As a result, new sales for FY21 registered a drop of 40.3% compared with RM387 million in FY20, no thanks to the various rounds of MCOs implemented, said Fateh Iskandar.
Notwithstanding that, the property developer posted a net profit of RM4.77 million for 4QFY21, versus a net loss of RM8.59 million in 4QFY20, amid pick-up in construction activities after the MCO. Quarterly revenue doubled to 115.43 million, from RM58.41 million.
For the full-year, Glomac’s net profit surged 125% to RM28.31 million from RM12.6 million in FY20, while revenue increased 49% to RM366.31 million from RM245.81 million.
Fateh Iskandar said the group's strong FY21 performance was driven by work in progress of new and ongoing phases such as Saujana Perdana, Plaza@Kelana Jaya, Saujana Rawang, Lakeside Boulevard and 121 Residences.
He also attributed the better performance to lower fair value loss of RM13 million in FY21, versus RM24.6 million in FY20.
Glomac’s share price closed one sen or 2.94% higher at 35 sen today, giving it a market capitalisation of RM280 million. The group saw 11,873 shares traded.