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Gamuda 1Q16 Net Profit Drops 13%
Malaysia Daily Bulletin | 17 December 2015
  • Gamuda’s 1Q16 earnings declined 13.2 percent to RM161.2 million, attributable to the completion of the electrified double tracking railway project in November 2014 and the softening of the property market in Malaysia.
  • Turnover for the quarter also fell 10 percent to RM512.8 million, though the group noted that revenue including share of joint venture companies’ was higher at RM1.2 billion mainly from higher work progress of the Klang Valley Mass Rapid Transit (MRT)-Line 1 project.
  • For FY16, the firm expects a good performance from on-going construction projects and steady earnings from the water and expressway concessions division, but noted that weaker growth for the property division is expected over the coming quarters.

Significance: Meanwhile, CIMB Equities Research sees the visibility of Gamuda’s next growth cycle as good, anchored by the potential securing up to RM6 billion in the MRT 2 works, which will increase its order book seven-fold. The research house has maintained its ‘Add’ call on the stock though with a lower target price of RM5.43 noting management’s new guidance on the timing of new jobs.

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