Gamuda’s 1QFY19 profit decreases on higher opex


Gamuda Bhd’s net profit for the first quarter ended Oct 31, 2018 (1QFY19), fell by 15.7% year-on-year (YoY) to RM172.04 million due to higher operating expenses (opex) in the period.

In an exchange filing last Friday, the company said it spent RM757.13 million in opex for the three months, a 22.78% YoY increase against RM616.66 million in 1QFY18.

The higher spending offset the 17.27% YoY improvement in revenue of RM903.88 million for the quarter.

Gamuda also stopped recognising its share of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) profits in the quarter, as the sale of Splash was done at the end of the last financial year.

Apart from its concession segment, its construction and property segments also recorded lower earnings contributions.

The company’s construction division posted lower earnings during the quarter due to lower profit contribution from the Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line (MRT2) project, while works on the Pan Borneo Sarawak Highway were progressing on schedule.

The diversified construction, property and engineering group added that the lower earnings from its property division for the period were mainly due to lower contribution from the property projects in the country.

Gamuda Land Sdn Bhd generated 70% of its earnings from its overseas projects, driven by robust sales of its two projects in Vietnam — namely, Celadon City in Ho Chi Minh City and Gamuda City in Hanoi — and the GEM Residences in Singapore which is almost fully sold.

The group expects a lower profit contribution from its water concession business this year, following last year’s disposal of its 40% stake in Splash to the Selangor state government.

The profit contribution from Gamuda Engineering Sdn Bhd is also expected to be affected by the reduction in the contract value of the MRT2 project, following renegotiations with the federal government recently.

Gamuda has proposed to undertake a renounceable rights issue of up to 759.58 million warrants at an issue price of 25 sen each, on the basis of one warrant for every four existing Gamuda shares held on an entitlement date to be determined and announced later.

Gamuda has also proposed an establishment of a dividend reinvestment plan that provides shareholders with an option to reinvest their cash dividends in new Gamuda shares.

Based on the issue price of 25 sen per warrant and assuming all the entitled shareholders subscribe in full for their respective entitlements, the total gross proceeds expected to be raised range from RM154.25 million to RM189.89 million.

The proceeds will be used for development costs and working capital.