Gamuda 1QFY18 net profit up 25%, declares 6 sen dividend

(Dec 15): Higher work progress by Gamuda Bhd’s construction division lifted the group’s net profit for the first financial quarter ended Oct 31, 2017 (1QFY18) by 25.2% to RM203.02 million, from RM162.15 million a year ago.

Earnings per share rose to 8.27 sen in 1QFY18, from 6.7 sen.

Quarterly revenue rose 52.9% to RM771.82 million from RM504.88 million in 1QFY17, mainly due to higher work progress from the group’s various construction projects, coupled with stronger overseas property sales and several new property projects in .

It also declared a first interim dividend of 6 sen per share for the ending July 31, 2018 (FY18), payable on Jan 25, 2018.

In a filing with Bursa Malaysia, Gamuda said its construction division’s revenue grew 49% to RM1.03 billion in 1QFY18 compared with RM696 million a year ago, mainly due to higher work progress from the Mass Rapid Transit Line 2 (MRT2) project, where the group is the project delivery partner and the sole underground works package contractor.

“To date, RM30.8 billion representing 97% of the overall works packages have been awarded. The overall cumulative progress at end of October 2017 is 13.3%,” the filing added.

Meanwhile, Gamuda said its construction works on the Pan Borneo Highway — Pantu Junction to Btg Skrang — is progressing on schedule.

The group’s property arm also saw better sales from local established projects such as Horizon Hills, Jade Hills, The Roberston and new project launches in Gamuda Gardens and twentyfive.7.

On prospects, Gamuda said the cumulative progress of its work portion under the Pan Borneo Highway project is on track at 11.7% as at November 2017. 

Its property arm is also poised to hit RM3.5 billion in FY18, up from RM2.4 billion a year earlier.

It also pointed to a delay in the MRT2 underground package works, amid design changes and late access to lands within the work scope.

“Working with the client, MMC Gamuda KVMRT have proactively considered measures to catch up these delays, and have recently made an acceleration proposal to Mass Rapid Transit Corp Sdn Bhd that details such measures as required to achieve the original line opening date,” Gamuda said. The company expects a final word on the proposal by end of 2017.

Meanwhile, Gamuda’s negotiations with the Selangor state government on its effort to acquire the water assets and operations of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash), the concession holder of the Sungai Selangor Water Supply Scheme Phase 1 and 3, are still ongoing.

“The Selangor and the federal governments are still finalising certain matters among themselves, in order to complete the takeover. They have mutually agreed to extend the takeover deadline to July 4, 2018,” Gamuda said. Earlier reports indicated the book value of Splash to be somewhere between RM2.8 billion and RM3.2 billion.

On current year prospects, Gamuda anticipates a better performance this year as MRT2’s progress picks up pace, alongside contributions from stronger property sales both overseas and in Malaysia; as well as from steady earnings contribution from the expressway division. 

Shares of Gamuda closed unchanged at RM4.75 today, with 4.42 million shares traded, giving it a market capitalisation of RM11.66 billion. 

Source: The Edge Markets

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