Glomac Berhad (Glomac) FY24 core net income of RM6.6m came below expectations, the negative deviation was due to the weaker than expected progress billing in 4QFY24.
MIDF Research, in a note today (June 14), said Glomac recorded a core net loss of – RM1.8m in 4QFY24 against core net income of RM4.3m in 3QFY24 due to lower revenue recognition from its property projects (-31.2%qoq). That brought cumulative core net earnings in FY24 to RM6.6m (- 79%yoy).
The weaker earnings were in line with lower revenue (- 21.8%yoy) as progress billing from its projects was weaker than expected. Glomac proposed a dividend of 1.25sen per share for FY24 which translates into a dividend yield of 2.8%.
While the earnings of Glomac is unexciting, MIDF foresees sales prospect to remain stable. MIDF has downgraded their call on Glomac to NEUTRAL from Buy due to limited upside with an unchanged TP of RM0.43.
Besides, the lower gross profit margin of 28% in FY24 against that of 31% in FY23 dragged earnings mainly due to earnings recognition from lower margin projects namely Seri Kenanga RSKU.
On a positive note, the balance sheet of Glomac remains healthy with a low net gearing of 0.06x.
Glomac registered strong sales of RM218m in 4QFY24, bringing total new sales to RM360m in FY24, which is higher than new sales of RM302m in FY23.
Meanwhile, 60% of new sales in FY24 were contributed by projects at Lakeside Residences which include semi-D projects and shop lots.
Looking forward, new sales momentum in FY25 is expected to be stronger due to a planned launch with GDV of 425m for FY25. On the other hand, unbilled sales increased to RM504m in 4QFY24 from RM347m in 3QFY24, providing close to two years’ earnings visibility, MIDF said.
