Gamuda falls 3.57% on 4Q net loss

KUALA LUMPUR (Oct 1): Gamuda Bhd shares fell 3.57% this morning after it posted a net loss of RM101.08 million in the fourth financial quarter ended July 31, 2018 compared to a net profit of RM102.75 million a year ago due to a one-off loss on disposal of its 40%-owned associate Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) amounting to RM300 million, and impairment on investment in Gamuda Water Sdn Bhd totalling RM4 million.

At 9.10am, Gamuda fell 12 sen to RM3.24 with 605,400 shares done.

Quarterly revenue came in 19.9% higher at RM1.21 billion from RM1.01 billion a year ago.

However, the weak quarterly earnings dragged down the group's net profit for the full FY18 by 14.7% to RM513.88 million, from RM602.09 million a year ago, even though revenue climbed 31.6% higher to RM4.23 billion from RM3.21 billion.

Meanwhile, CIMB IB Research maintained its “Reduce” rating on Gamuda at RM3.36 with a lower target price of RM3.05 (from RM3.10) and said Gamuda’s FY7/18 core net profit beat house and consensus numbers despite booking in RM305 million impairment from water deals. Property was the star performer.

In a report today, the research house said it remains bearish on contract outlook and foresee downside to construction earnings from MRT 2 cost rationalisation (pending announcement).

“Cutting FY19-20F EPS (removal of Splash and lower construction margin); target price lowered to RM3.05 as we roll over to end-CY19. Maintain Reduce,” it said. —

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