Glomac sees KL projects boosting 2009 earnings

By BUSINESS TIMES

GLOMAC Bhd expects to improve its net profit in fiscal 2009, thanks to sales of its Glomac Tower and Suria Stonor projects in Kuala Lumpur.

The property developer made net profit of RM35.1 million in the year ended April 30 2008, on revenue of RM324 million.

However, sales of properties costing below RM300,000 are affected by higher prices although demand for high-end properties is still firm, group managing director Datuk F.D. Iskandar said.

“With more launches over the next one year, there should be more sales. But we will look back at figures in terms of profitability,” he said after the company’s shareholder meeting in Kuala Lumpur yesterday.

Glomac has raised by 20 per cent the prices for properties costing below RM300,000 at its townships in Sungai Buloh, Rawang and Johor.

“Margins are squeezed by higher construction cost, which has gone up by 30 per cent. By raising the selling price, it has affected sales,” Iskandar said.

Glomac has 400ha in Sg Buloh, Rawang and Johor, with earnings potential of RM3.5 billion.

While the three townships may not do well this year, Iskandar said he was confident of sales for its seven other projects.

Glomac has pockets of land in Selangor. It aims to launch Glomac Damansara, an integrated project, a commercial complex at the site of the former Kelana Seafood Centre in Petaling Jaya, and two office towers and a serviced apartment block in Mutiara Damansara for RM1.1 billion.

Group executive vice-chairman Datuk Richard Fong was optimistic that margins from high-end properties would cushion rising costs.

Glomac has plans to venture to the Middle East.

Fong said it may do this through its partnership with Al Batha Real Estate Co of the United Arab Emirates or with other developers in the region.

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