No dividend from Gamuda as quarterly profit falls 77% on MCO woes

KUALA LUMPUR (June 25): Gamuda Bhd’s net profit for its third financial quarter ended April 30, 2020 (3QFY20) slumped 77.14% to RM40.23 million from RM175.99 million a year earlier, as its Malaysian operations were affected by the movement control order (MCO) imposed during the final six weeks of the quarter.

Earnings per share fell to 1.6 sen from 7.13 sen in 3QFY19, the group’s filing with Bursa Malaysia showed.

Gamuda said the MCO, imposed on March 18 to halt the spread of the Covid-19 pandemic, caused work stoppages and reduced traffic volume across its four expressways, as a result of which the group recorded its lowest quarterly revenue since 1QFY17.

Following this, the group decided that no dividend will be paid for the quarter. It had paid out a dividend of six sen per share for 1QFY20 and has consistently paid 12 sen dividend for every financial year since FY09.

Gamuda’s revenue for 3QFY20 fell 46.96% to RM549.9 million from RM1.04 billion in the year-ago quarter.

While property sales in Malaysia fell 58% to RM90 million from RM215 million due to the MCO, the saving grace was the overseas market, which contributed two-thirds of overall property sales in the quarter, the group said.

Gamuda’s property sales continued to do well in Vietnam while it also managed to sell one-third or S$219 million worth of its latest Singapore property project, OLA Residences, during its maiden launch in March.

The dismal quarterly performance dragged Gamuda’s net profit for the nine-month period ended April 30, 2020 down 25.36% to RM389.02 million from RM521.17 million in the previous corresponding period.

Similarly, cumulative revenue fell 10.74% to RM2.74 billion from RM3.07 billion.

Gamuda said the progress of the MRT Putrajaya Line (Line 2) was picking up pace, while the group’s property division and expressways were delivering steady results up until the imposition of MCO in mid-March.

“Gamuda Land sold RM1.2 billion worth of properties for the first nine months of this year, lower than the RM2 billion sales for the same period last year,” it added.

MRT2, overseas property sales to support FY20 performance

On prospects, Gamuda pointed to the COVID-19 uncertainties and low oil prices as potential headwinds, with the latter expected to weigh on the Government’s plans for infrastructure development.

“It is anticipated that current year’s performance will be driven by overseas property sales especially Vietnam and the continued progress of MRT Line 2,” the group said.

Gamuda said the completion of MRT2 is still expected to be within the contractual dates despite the delays caused by the MCO.

“Moving forward, the resilience of the group is underpinned by its construction order book of RM7 billion and unbilled property sales totalling RM3 billion which will see it through the next two years. On top of that, the group has a healthy balance sheet with a prudent gearing of 0.4 times,” it added.

On local property sales, Gamuda said it has launched the online deals platform to extend market reach following the new norm, with its showrooms reactivated since May. The group has eight on-going property projects across Malaysia.

Shares of Gamuda slid three sen or 0.84% to close at RM3.53 yesterday, valuing the group at RM8.87 billion.

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