Gamuda net profit falls 23% in 2Q following Splash sale

KUALA LUMPUR (March 28): Gamuda Bhd’s net profit fell 23% to RM173.14 million in the second quarter ended Jan 31, 2019 (2QFY19) from RM223.64 million in the previous year’s corresponding quarter, as it ceased recognition of its share of profits from Syarikat Pengeluar Air Sungai Selangor (Splash).

Revenue for the quarter increased 13% to RM1.13 billion from RM998.92 million a year earlier.

“Gamuda group posted lower quarterly net profit of RM173 million compared with RM224 million for the same quarter last year mainly because the group stopped recognising its share of Splash profits following the sale of Splash at the end of last year,” it said in a Bursa filing.

Segmentally, the group saw lower construction earnings from Gamuda Engineering due to the reduction in contract value for the Mass Rapid Transit (MRT) Line 2 project.

Gamuda Land also posted lower overall property earnings due to lower contribution from its new townships in Malaysia during the quarter, although this was partly offset by its two projects in Vietnam which continued to sell well, along with its GEM Residences in Singapore, which are almost fully sold and made significant contributions to its earnings.

For the first half of its financial year, net profit declined 19% to RM345.18 million from RM427.72 million in the corresponding period a year earlier, despite revenue climbing 15% to RM2.03 billion from RM1.77 billion.

Going forward, the group said its performance for the year will be driven by overseas property sales in Vietnam and Singapore, the continued progress of MRT Line 2, and steady earnings contribution from the expressway division.

Gamuda said works for the MRT Line 2 is on track, with elevated works at 40% completion, while underground works are at 49% completion.

For its property division, the group said construction works for Anchorvale Crescent, its new project in Singapore, is expected to commence in mid-2019. The group said its overseas projects in Vietnam, Singapore and Australia now represent two thirds of its total property sales.

In Malaysia, the group will be launching more landed and high-rise residential components within the next six months.

For the expressway division, it said traffic volumes have been stable and resilient and that the group is currently in talks with the Government in relation to the proposed acquisition of all four tolled expressways under Gamuda.

Gamuda shares slipped 4 sen or 1.41% to close at RM2.80 yesterday, giving it a market capitalisation of RM6.91 billion. — theedgemarkets.com

Click here for more property stories.