Gamuda banks on overseas properties

The group resilience is underpinned by its construction orderbook of RM7b and unbilled property sales totalling RM3b


GAMUDA Bhd is banking on its overseas properties sales particularly in Vietnam and the continued progress of the Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line2 (MRT2) to boost earnings for the financial year ending July 31, 2020 (FY20).

“Moving forward, the resilience of the group is underpinned by its construction orderbook of RM7 billion and unbilled property sales totalling RM3 billion which will see it through the next two years,” it said in an exchange filing yesterday.

Government plans for infrastructure development will be constrained by low crude oil prices and increased spending on measures to contain the pandemic and its effects, it added.

For the third quarter ended April 30, 2020 (3Q20), Gamuda’s net profit plunged 77.1% to RM40.23 million from RM175.99 million last year, while quarterly revenue fell 47% to RM549.9 million from RM1.04 billion in 3QFY19.

This was a result of work stoppages, lack of property sales and low traffic plying its four expressways during Malaysia’s Movement Control Order (MCO).

“During the MCO period, all work virtually stopped, except for works deemed critical for public safety. All property sales galleries were also closed,” the engineering, construction and property group said.

Despite the relaxation of certain regulations under the Conditional MCO, which began on May 4, supply chains continued to be impacted and thus affected the ramping up of works. Movement restrictions were also imposed in all other countries where the group operates, although its property sales in Vietnam continued to do well.

Gamuda’s latest property project in Singapore also sold one-third or S$219 million (RM673.68 million) worth of properties during its maiden launch in mid-March 2020.

“Overseas property projects continued to lead in sales performance, contributing two-thirds of overall property sales,” it noted.

The group’s property arm, Gamuda Land, sold RM250 million worth of properties versus RM650 million sold last year, mainly due to the Covid-19 pandemic.

For the nine months ended April 30, it recorded RM1.2 billion in property sales against RM2 billion sold a year earlier.

As movement restrictions are expected to be in force over the next few months, the group will focus on converting its RM1.2 billion confirmed bookings into sales, to achieve RM2 billion overall sales for FY20.

It added that the MRT2 project, Gamuda’s other key driver for the year, is expected to be completed within the contractual dates despite delays from the MCO.

MMC Gamuda KVMRT (T) Sdn Bhd, the group’s joint-venture with MMC Corp Bhd, is the turnkey contractor for the elevated and underground works for the MRT2, with a contract price of RM30.53 billion.