Gamuda: No further IBS asset impairment likely in near term

KUALA LUMPUR: Gamuda Bhd does not expect further impairment of its industrial building system (IBS) assets in the near future.

This is after Gamuda set aside a one-off non-cash impairment of RM148 million on the assets in the latest financial year.

The group provided the RM148 million in the fourth quarter ended July 31 as it temporarily shut down one of its two IBS factories.

This was due to the slower pace of building construction caused by the stringent standard operating procedures and the Covid19 impact on the supply chain, Gamuda said in a statement on Friday.

“As the pace of building works slowed because contractors were only able to operate at about half the capacity, the group has temporarily shut down its smaller IBS factory in Sepang and consolidated all operations at the larger Banting factory.

“This has resulted in the group posting a RM17.34 million net loss in the fourth quarter from a net profit of RM179.02 million in the same quarter the previous year.”

Gamuda said excluding the one-off non-cash impairment, the group had posted a core net profit of RM131 million in the quarter under review.

Its revenue in the fourth quarter decreased 38.2 per cent to RM926.52 million from RM1.49 billion previously.

Gamuda said its property development arm, Gamuda Land, sold RM1 billion worth of properties in the quarter.

This was a sharp rebound from the previous quarter’s sales of RM250 million, and almost on a par with the RM1.1 billion sold in the fourth quarter of financial year 2019.

For the full-year, the group’s net profit fell 47 per cent to RM371.68 million from RM700.19 million, while revenue eased 20 per cent to RM3.66 billion from RM4.57 billion.

Gamuda said excluding the one-off non-cash impairment of RM148 million, the group posted an annual core net profit of RM520 million, a 26 per cent decrease from last year’s RM700 million net profit.

This was because of work stoppages, absence of property sales and low traffic plying its four expressways due to the Movement Control Order.

Gamuda said its resilience is underpinned by a construction order book of RM7 billion and unbilled property sales totalling RM3.3 billion, which will see it through the next two years.

It also said Gamuda Australia is bidding for over A$10 billion worth of projects in Australia.