Gamuda posts 4Q net loss of RM101m

by FARA AISYAH / graphic by TMR

GAMUDA Bhd recorded a net loss of RM101.08 million in the fourth quarter ended July 31, 2018 (4QFY18), against a net profit of RM102.75 million a year ago, due to one-off losses on the disposal of Syarikat Pengeluar Air Selangor Holdings Bhd (Splash) and impairment on investment in Gamuda Water Sdn Bhd.

In a filing last Friday, Gamuda noted the losses on the disposal of Splash was RM300 million, while the impairment on investment in Gamuda Water was RM4 million.

“Excluding this quarter’s one-off losses and last year’s one-off impairment loss on investment in Smart expressway of RM98 million, Gamuda group achieved a core net profit of RM203 million in 4QFY18, an increase of 1% compared to RM201 million for the same quarter last year,” its filing read.

Gamuda also said the increase in its revenue and core net profit for the quarter resulted mainly from higher property sales of its projects in Vietnam and Singapore, as well as work progress made at its ongoing construction projects.

The company reported an increase of 19.8% year-on-year (YoY) in revenue for the quarter to RM1.21 billion.

Including its share of joint-venture (JV) companies’ revenue, the construction division’s revenue grew 22% YoY to a record-high of RM4.1 billion for financial year 2018 (FY18) as core net profit grew by 32% YoY to a record high of RM297 million, mainly due to higher work progress at the Klang Valley Mass Rapid Transit (KVMRT) Line 2 project where the group is the project delivery partner and the sole underground works package contractor.

The property division achieved a record-high sales of RM3.6 billion, surpassing its RM3.5 billion targeted sales. Including its share of JV companies’ revenue, the property division reported a revenue of RM2.6 billion and core net profit of RM206 million in FY18, compared to a revenue of RM1.9 billion and a core net profit of RM165 million in the preceding year.

The infrastructure concessions division reported a revenue of RM512 million (excluding share of associated companies’ revenue), which is similar to last year’s financial performance, while its core net profit reported an increase of 2% YoY to RM316 million.

The group expects a lower profit contribution from its water concessions business next year following the disposal of its 40% stake in Splash, the concession holder of the Sungai Selangor Water Supply Scheme Phase 1 and 3.

“Nevertheless, the group anticipates a better overall performance next year on the back of higher property sales, driven by overseas projects especially Vietnam and the launching of new townships in Malaysia; the progress of KVMRT Line 2 continuing to pick up pace; and steady earnings contribution from the expressway division,” Gamuda said.

The Malaysian Reserve recently reported Gamuda’s nearto mid-term outlook remains cloudy despite its recent successful land bid in Singapore, as the current state of its construction and toll concession segments continues to overshadow its property business.

Hong Leong Investment Bank Bhd believes Gamuda’s land purchase in Singapore recently is unlikely to help make up the shortfall caused by the slowdown in the local construction industry.

The bank thinks the bigger near-term catalyst for Gamuda would be the Penang Transport Master Plan project.