KUALA LUMPUR: MIDF Research has cast a positive outlook on Glomac Bhd (Glomac) for its new sales outlook despite having recorded a core net earnings of RM17.5 million for nine months in financial year 2023 (9MFY23) that is below its expectation.
MIDF Research said Glomac's core earnings had only made up 42 per cent and 47 per cent of the firm and consensus' full-year forecast respectively.
"The negative deviation was mainly due to lower than expected progress billing, higher than expected tax expenses and higher than expected operating expenses in the third quarter financial year 2023(3QFY23).
"Besides, earnings were also impacted by higher tax rate due to effect of non-recognition of deferred tax assets on loss-making companies," it said.
MIDF Research said Glomac's revenue was higher in 9MFY23 due to higher progress billing as construction activities resumed from lockdown in 9MFY22.
Key projects that contributed to earnings in 9MFY23 include ongoing phases at Saujana Perdana, 121 Residences and Plaza @ Kelana Jaya
The firm, however, said Glomac had recorded new property sales of RM48 million in 3QFY23.
This was lower than the new sales of RM54 million in the second quarter of the same financial year which brought the total new sales to RM154 million in 9MFY23.
MIDF Research projected the company's new sales in financial year 2023 to be higher than new sales of RM160 million from the previous year.
This is supported by planned launches that brought in total gross development value (GDV) of RM510 million in the fourth quarter of financial year 2023 (4QFY23).
"Planned launches in 4QFY23 include GreenTec with GDV of RM340 million, Saujana KLIA with GDV of RM100 million and Lakeside Residences of RM70 million.
MIDF Research maintained its "Buy" on Glomac with a revised target price of 43 sen.