The affirmation of Glomac Berhad’s (“Glomac”) ratings reflects the company’s established position as a reputable property developer in the Klang Valley; its strong financial performance coupled with a promising cashflow generating capacity and the impressive performance of its Aman Suria Damansara (“Aman Suria”) and Saujana Utama projects. The moderating factor continues to be the vulnerability of the projects to adverse developments in the property market.

Glomac’s entry into property development began in 1988 and was primarily recognised as a commercial developer with landmark buildings in Kelana Jaya namely Glomac Business Centre, Kelana Business Centre and Kelana Centre Point. In line with market demand, Glomac is presently focusing on mixed residential developments, concentrating within the Klang Valley and Johor. As at 30 June 2004, total sales of its developments stood at RM1.1 billion. With the recent purchase of four parcels of prime land in the Klang Valley, its landbank expanded to 1,102 acres, ensuring future developments for the next six to eight years.

Property development represented 90% of Glomac’s revenue for fiscal 2004 and its flagship development Aman Suria contributed 47% of the said revenue. With the encouraging response to the upcoming projects in the Klang Valley namely, Suria Stonor, an exclusive high rise condominium development and Glomac Square, a commercial development, a positive revenue growth is expected for the next few years.

Specific phases in the development projects of Aman Suria, Saujana Utama II and Sri Saujana have been earmarked for the redemption of the Senior BaIDS. As at 30 June 2004, the total amount collected from these phases stood at RM293.6 million representing a security cover of 5.9 times over the Senior BaIDS.

In FY2004, Glomac’s revenue increased by 51% driven mainly by sales from Aman Suria. Nevertheless, Glomac’s operating profit margin declined by three basis points resulting from a provision for losses incurred in respect of low cost housing developments in FY2004. However, pre tax profit improved by 33% on the back of higher revenue and an exceptional gain of RM4.3 million from the sale of an investment property.

The Group’s debt leverage level remained stable at 0.5 times in FY2004 as the effect of the issuance of the Islamic PDS was moderated by an increase in shareholders’ funds of RM69.0 million aided by strong retained earnings and a private placement of 15.0 million shares.