Gamuda’s 1Q earnings hit by virus measures

It anticipates this year’s performance to be driven by overseas property sales in Vietnam and Singapore, among others


GAMUDA Bhd’s performance has been severely impacted by the Movement Control Order (MCO), but the company will leverage its overseas market in Singapore and Vietnam, as well as the continued progress of Mass Rapid Transit (MRT) Putrajaya Line — previously known as MRT2.

Gamuda’s net profit for the first quarter of the financial year 2021 ending Oct 31, 2020 (1Q21) fell 37% to RM109.3 million compared to RM173.6 million net profit it made in 1Q20, according to a Bursa statement yesterday.

Revenue for the period fell 16% to RM1.51 billion from RM1.8 billion in the corresponding quarter last year.

“The group’s financial performance for the first three months of this year (Aug-Oct 2020) continued resilience despite the reimposition of Conditional MCO (CMCO) in most parts of Malaysia at the tail end of this quarter.

“Following the easing of movement restrictions in early May 2020, works at all construction and property projects gradually picked up pace, while traffic plying the expressways was returning to pre-movement restrictions level,” it said in a filing to Bursa Malaysia yesterday.

The diversified group anticipates this year’s performance to be driven by overseas property sales in Vietnam and Singapore, as well as the continued progress of MRT Putrajaya Line.

Gamuda posted a net loss of RM17.34 million in 4Q20 due to a one-off non-cash impairment of RM148 million for the temporary shutdown of its industrialised building system factory in Sepang, Selangor.

The shutdown was due to a slower pace of building works, given that contractors were only able to operate at about half capacity.

Gamuda also attributed the loss to the lower domestic property earnings.

Moving forward, Gamuda said the resilience of the group is underpinned by its construction orderbook of RM6.1 billion and

unbilled property sales totalling RM3.2 billion, which will see the group through the next two years.

“The group has a healthy balance sheet with a prudent gearing of 0.3 time,” it added.

Gamuda said as of October 2020, its MRT Putrajaya Line elevated works package was on schedule at 87% completion, while underground works were also on schedule at 82%.

In January 2020, MMC Corp Bhd and Gamuda formalised their roles to a joint turnkey contractor for the Klang Valley MRT, from project delivery partner (PDP) previously.

The contract price is fixed at RM30.53 billion. The phase one of the rail line from Kwasa Damansara station to Kampung Batu should commence operations in July 2021.

Besides MRT2, Gamuda on July 1, 2020, via its 60%-owned SRS Consortium Sdn Bhd, executed the master agreement with the state government of Penang in respect to the appointment as the PDP to manage and deliver the Penang Transport Master Plan (PTMP).

The major components in the first phase of the project are reclamation works of the 931ha Island A at Penang South, Light Rail Transit from George Town to Island A and the Pan Island Link 1 (PIL1) highway.

The implementation of each PTMP component will be formalised at a later stage when the financial architecture is mutually agreed with the Penang state government. The PDP fee for the PTMP components varies between 5% and 5.75%.

The reclamation of Island A is targeted to commence in 1Q21, Gamuda said.

On Nov 12, 2019, the Land Transport Authority of Singapore awarded the S$260 million (RM787.2 million) contract for the Batu Gali multistorey bus depot to Greatearth Corp Pte Ltd-Gamuda joint venture (JV).

The project consists of a three-storey administrative building, five-storey dormitory and five-storey main depot equipped with parking spaces for 715 buses, refuelling and washing facilities, and repair and maintenance facili- ties with cutting-edge technology to cater to the operation of electric buses.

The contract duration is 41 months, and overall, the project’s progress was at 5% as of October 2020.

In Taiwan, Gamuda said the group’s 70%-owned JV with a Taiwanese company is constructing a 1.23km marine bridge worth NT$3.95 million (RM568.55 million) for CPC Corp, a state-owned petroleum company, with progress currently standing at 29%. It is expected to be completed in November 2022.

Meanwhile, Gamuda’s property division sold RM673 million worth of properties this quarter compared to RM509 million sales in the same quarter last year, with its overseas sales from Vietnam continuing to lead in sales performance, contributing two-thirds of its overall sales.

“Our overseas projects continued to deliver steady sales performance with Gamuda City in Hanoi and Celadon City in Ho Chi Minh, both in Vietnam, remaining the biggest contributor.

“Sales at 661 Chapel St in Melbourne, Australia, improved. Meanwhile, Ola Residences, our latest executive condominium in Singapore with a gross development value of S$660 million, continued to receive good response since its launch in March with 38% or S$253 million worth of properties being sold,” the company said.

Gamuda added that its property business saw a steady pickup in sales despite the soft market.

Gamuda noted that since the lifting of MCO in May 2020, the traffic volumes on all four of its highways were trending upwards towards pre-MCO levels until the reimposition of CMCO for the Klang Valley in mid-October 2020.

Gamuda’s shares rose 10 sen to close at RM3.86 yesterday.