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Gadang bids for more than RM2b jobs

KUALA LUMPUR: Gadang Holdings Bhd is bidding for several engineering and construction projects totalling more than RM2 billion and the company anticipates stronger earnings for the financial year 2011 ended May 31.

Its managing director and chief executive officer Tan Sri Kok Onn said among the tenders were for the proposed development of the Women and Children Hospital in Kuala Lumpur announced under Budget 2011, the 300MW Kimanis power plant in Sabah and the 1,000MW Manjung power plant in Perak.

"We hope to build up our name by participating in tenders. We are not a GLC (government-linked company) but have the fundamentals to secure projects," he told reporters after Gadang's AGM.

Kok said the group was also participating in the re-tendering of the RM350 million Shah Alam Hospital project and that it would continue to bid for government and private finance initiative (PFI) projects.

He noted that engineering and construction, which contributes more than 70% of Gadang's revenue, would continue to be its main business thrust, noting that the division's order book stood about RM560 million currently.

According to him, the major contracts in progress include the RM292 million contract to construct the runways and taxiways for the new LCC terminal as well as the RM342 million Hospital Rehabilitasi Cheras (Baru) project.

Commenting on the company's share price, Kok opined the shares were currently undervalued based on NTA (net tangible asset) per share of about RM1.60.

The stock price on Tuesday shed one sen to close at 69 sen with 750,400 units transacted. The counter has declined 30.3% year-to-date.

Gadang's net profit for the 1Q11 ended Aug 31, 2010 soared 80% to RM6.4 million from RM3.55 million a year ago on stronger revenue of RM82.63 million versus RM58.41 million.

It recorded earnings per share of 5.43 sen for 1Q11 against 3.01 sen previously while net assets per share stood at RM1.65 as at Aug 31.

"We expect our results in (FY) 2011 to be better than previous year," he said when asked on its financial performance for FY11. It posted net profit of RM13.88 million and revenue of RM270.45 million for FY10.

On its property segment, he said Gadang planned to launch mixed development projects worth RM800 million in gross development value (GDV) in the Klang Valley, Johor and Penang over the next 12 months.

He said the launches would kick off with the Jentayu Residensi project in Tampoi, Johor, at the end of November that consists of apartment units, retail shops and offices. The project has an estimated GDV of RM114 million.

Other projects expected to be launched end-2011, he said, include the estimated RM302 million GDV project in Salak South, Kuala Lumpur which comprises 800 units of apartment and 10 shops on a 12.2-acre land.

Gadang's recently completed projects include M Avenue in Segambut, with RM56.21 million GDV, Taman Seri Bukit Segambut (RM40 million GDV) and Taman Pinggiran Pelangi (RM64 million GDV) in Rawang. Touching on its water concession, Kok said Gadang was actively involved in the Indonesian water supply and had acquired five water concessions in the preceding years through its wholly owned subsidiary Asian Utilities Pte Ltd.
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