GAMUDA PROFIT SEEN PICKING UP NEXT YEAR
Firm will continue benefitting from large infrastructure projects to be rolled in two or three years, says PublicInvest
GAMUDA Bhd’s earnings are expected to pick up pace from financial year (FY) 2018 as the company will continue to benefit from its large infrastructure projects, which are expected to be rolled out over the next two to three years.
Public Investment Bank Bhd (PublicInvest) said with an outstanding construction order book of RM7.8 billion, Gamuda was targeting to clinch RM10 billion worth of new jobs this year and next year.
Gamuda recorded a revenue jump of RM1.01 billion in its fourth quarter ended July from RM614 million in the same period a year ago.
For the full year, the company registered RM3.2 billion in revenue, higher than RM2.12 billion a year ago, mainly due to the progress at its various construction projects and better property sales.
“We revised our 2018/2019 net profit upwards by four per cent to account for stronger property sales and jobs billings,” said PublicInvest in a note yesterday.
However, its net profit of RM602.09 million for the full year was lower than RM626.13 million a year ago, mainly due to a oneoff provision for impairment on the SMART expressway of RM98.45 million.
PublicInvest said after stripping out the one-off impairment, the group’s normalised net profit of RM700.5 million was within the investment bank’s and consensus’ full-year net profit estimates of 98 per cent and 100 per cent, respectively.
Gamuda, in its Bursa Malaysia filing, said the company expected better performance next year as the Mass Rapid Transit Line 2’s progress picked up pace and via contributions from steady earnings of its expressway division.
“The property division’s performance is also expected to be stronger next year due to the launches of several new projects in Malaysia and overseas,” it said.
Noting that construction will again be the key profit driver for the company moving forward, PublicInvest maintains its “outperform” call on Gamuda with an unchanged target price of RM6.20.