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Gamuda active, up 1.07% after saying yes to MoF’s RM6.2b takeover offer for highways

KUALA LUMPUR (June 28): Gamuda Bhd shares rose 1.07% in active trade this morning after the group said its board of directors is in favour of accepting the Federal Government's offer to take over all four toll concessionaires linked to the group for a combined RM6.2 billion at enterprise value.

At 9.12am, Gamuda rose 4 sen to RM3.76 for a market capitalisation of RM9.28 billion.

The concessionaires involved are Lingkaran Trans Kota Holdings Bhd (Litrak), Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd (Sprint), Kesas Sdn Bhd and Projek SMART Holdings Sdn Bhd.

Meanwhile, it said its net profit for the third quarter ended April 30, 2019 fell 15% year-on-year to RM175.99 million as the group stopped recognising its share of Splash profits following the sale of Splash at the end of last year.

Revenue during the quarter fell 16% to RM1.04 billion compared with RM1.24 billion a year ago.

For the cumulative nine months, net profit fell 18% to RM521.17 million compared with RM633.82 million previously while revenue was slightly up by 2% to RM3.07 billion from RM3 billion.

Kenanga IB Research has upgraded Gamuda to “Market Perform” at RM3.72 with a higher target price of RM3.75 (from RM2.90) and said  Gamuda’s 9M19 core net profit of RM521.2 million came in above expectations, making up 88%/85% of house/consensus full-year estimates.

“The positive deviation is mainly due to better than expected margins from both its construction and property development divisions.

“6 sen dividends were declared, bringing 9M19 to 12.0 sen as expected. Raised FY19-20E earnings by 15%-17%, respectively. Upgrade to MP with higher SoP-driven TP of RM3.75 (from UP; TP: RM2.90),” it said.

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