Gamuda eyes RM3 to RM4 billion new projects in FY17
KUCHING: Gamuda Bhd ( Gamuda) is eyeing new contracts worth approximately RM3-RM4 billion in financial year 2017 ( FY17) ending July 2017.
Fol lowing a company’s br ief i ng, Af f i n Hwang I nve s tment Bank Bhd ( Af finHwang Capital) in a report yesterday said Gamuda is bidding for new projects such as the Gemas- Johor Bahru Electrification Double Tracking Rai l, Light Rai l Transit Line 3 ( LRT3) in the Klang Valley and Pan Borneo Highway Sabah which could be worth approximately RM3 to RM4 billion in FY17.
Additionally, the research firm gathered that the construction firm is also interested to bid for the East Coast Rail Line ( ECRL) and KL- Singapore High- Speed Rail ( HSR) projects.
Concurring with AffinHwang Capital, AmInvestment Bank Bhd (AmInvestment Bank) in another report said Gamuda hopes to secure contracts worth RM3 to RM4 billion from Gemas – Johor Bahru double tracking rail, Pan Borneo Sabah Highway and LRT3 over the next 12 months.
The research firm observed that Gamuda is bullish on the out look for the local construction sector over the next three years, backed by KL- Singapore HSR, Mass Rapid Transit Line 3 ( MRT3), Penang Transport Master Plan ( PTMP) and ECRL projects.
Thus, AmInvestment Bank expects Gamuda to secure approximately RM2 billion of new jobs annually in FY17 and FY18 respectively.
For PTMP, the research firm noted Gamuda has already submitted the company’s plan for the George Town – Bayan Lepas LRT line to the Land Public Transport Commission (SPAD).
The company hopes to complete the environmental and social impact assessment studies for submission to the Department of Environment by January 2017.
Subsequently, it added the company expects approvals for the project to be obtained from the second half of 2017 (2H17).
AmInvestment Bank believed Gamuda is the best proxy to the booming construction sector in Malaysia given the company’s sizeable involvement in the MRT project in the Klang Valley and the construction of the Pan Borneo Highway in Sarawak.
Apart from that, the research division of Kenanga Investment Bank Bhd ( Kenanga Research) said Gamuda; s outstanding order book currently stodd at RM8.9 billion while the property division of the company has an unbilled sales of RM1.9 billion which provides 3-year visibility.
Meanwhi le, Gamuda told Bursa Malaysia on December 16 that earnings for the first quarter of financial year 2017 ( 1QFY17) ended October 2016 remained f lat at RM162.15 million compared with RM161.23 million recorded in 1QFY16 ended October 2015.
However, the company said 1QFY17 revenue decreased by 1.5 per cent year- on-year ( y- o-y) to RM504.88 million from RM512.79 million generated in 1QFY16.
Nonetheless, MIDF Research believed Gamuda’s construction segment will still lead the way in earnings contribution in FY17 due to the initial works of the Klang Valley Mass Rapid Transit Line 2 ( MRT2) project and the PTMP which comprises of LRT from Komtar to Penang International Airport and Pan Island Link highway as well as reclamation works.