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Gamuda falls into the red on one-off impairment

KUALA LUMPUR (Sept 26): Gamuda Bhd has fallen into the red with a net loss of RM17.34 million for the fourth quarter ended July 31, 2020 (4QFY20) amid a one-off asset impairment following the shutdown of one of its Industrialised Building System (IBS) factories.

The group had reported a net profit of RM40.23 million for the preceding quarter (3QFY20). For the same quarter a year earlier (4QFY19), Gamuda posted a net profit of RM179.02 million.

Revenue for the quarter increased 68% to RM926.52 million from RM549.9 million in the preceding quarter, but was lower by 38% when compared with RM1.5 billion for 4QFY19.

The group set aside a one-off non-cash asset impairment of RM148 million as it had to temporarily shut down one of two IBS factories, due to the slower pace of building construction amid the stringent Covid-19 standard operating procedures.

"As the pace of building works slowed because contractors were only able to operate at about half capacity, the group temporarily shut down its smaller IBS factory in Sepang and consolidated all operations at the larger IBS Banting factory," said Gamuda yesterday in its filing with Bursa Malaysia.

Subsequent to the one-off non-cash impairment, the group does not expect any further impairment on the IBS assets in the foreseeable future.

Excluding the one-off non-cash impairment, the group posted a core net profit of RM131 million, almost four times the profit recorded in the preceding quarter.

Meanwhile, Gamuda Land sold RM1 billion worth of properties during the quarter, rebounding sharply from the previous quarter's sales of RM250 million, and almost on par with the RM1.1 billion sold in 4QFY19.

For the full year, Gamuda's net profit fell 47% to RM371.68 million from RM700.19 million a year earlier, while revenue contracted 20% to RM3.66 billion from RM4.57 billion.

"The resilience of the group is underpinned by its construction order book of RM7 billion and unbilled property sales totalling RM3.3 billion, providing visibility over the next two years," the group said, adding that Gamuda Australia is actively bidding for over A$10 billion worth of projects in New South Wales, Victoria, Queensland and Western Australia.

Gamuda's share price fell one sen or 0.31% to RM3.25 yesteday, giving a market capitalisation of RM8.17 billion.

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