Gamuda 1Q earnings flat at RM162 mil as revenue dips on completion of MRT1 work

KUALA LUMPUR (Dec 16): Engineering, construction and infrastructure player Gamuda Bhd's net profit came in largely flat in its first quarter with a slight dip in revenue as construction works for the MRT1 or MRT Line 1 tapers off.

Net profit for the quarter ended Oct 31, 2016 (1QFY17) came in at RM162.14 million, compared with RM161.23 million a year ago, as revenue slid 1.5% to RM504.88 million from RM512.79.

The lower revenue was mainly because of lower revenue from its construction and property divisions, the effects of which were mitigated by toll rate hikes on certain expressways which boosted topline and profit before tax (PBT) in its water and expressway concessions division.

Though its construction division still saw improved PBT due to cost savings on the near completion of MRT1, its property division's PBT weakened on lower sales — it sold RM430 million worth of properties in the current quarter, compared with RM 1.5 billion in the previous quarter — with the softening of the local property market.

Yesterday, its joint-venture with MMC Corp Bhd, MMC Gamuda KVMRT (PDP) Sdn Bhd, i.e. the project delivery partner for MRT Line 1, said the line had been completed and the first phase launched that same day, two weeks ahead of schedule.

Today, Gamuda updated that preparatory works for relocation of utilities and site clearance for MRT Line 2 — for which its JV with MMC Corp is also the PDP — is progressing well, with tenders for the remaining main elevated civil works in progress and contract awards expected to be completed by the first quarter of 2017.

As for the Penang Transport Master Plan, for which its 60%-owned SRS Consortium is the PDP, it said the detailed environmental impact and assessment studies are at the final stages, and due to be completed by end-2016. "Final report submissions to the DOE (Department of Environment) will be in January 2017," it said.

Overall, Gamuda anticipates a good performance this year from the steady earnings from its expressway concessions division and the ramping up of works for the MRT Line 2. “The construction unbilled order book stands at a record RM9 billion,” it said.

As for property sales, it said that should pick up in the next few quarters due to the launches of several new projects, including the RM600 million Kundang Estates in Sungai Buloh North, Selangor.

Some 5km away from Kundang Estates, its 812-acre mixed use project, Gamuda Gardens, which carry a gross development value of RM10 billion, is also scheduled to be launched in early 2017.

This will be followed by the launch of twentyfive.7 — a 257-acre avant-garde lifestyle development with a GDV of RM3.8 billion — in Kota Kemuning, Selangor, in the first half of 2017.

"Planning and development approvals for the 1,530-acre development land opposite the Putrajaya/Cyberjaya interchange along Expressway Lingkaran Tengah are currently ongoing," it added.

It also said the disposal of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd to the Selangor government is expected to be completed by the second quarter of next year.

Gamuda shares closed down four sen or 0.82% lower at RM4.81, bringing it a market capitalisation of RM11.66 billion. — theedgemarkets.com