Softer property market weighs on Gamuda earnings

  • Business
  • Thursday, 24 Mar 2016

Government had given the final approval for the MRT Sungai Buloh-Serdang-Putrajaya Line (SSP Line) railway scheme

KUALA LUMPUR: Infrastructure-property company Gamuda Bhd reported a decline in earnings in the second quarter ended Jan 31, 2016 due to softerning property market in Malaysia and tapering of the works in the Klang Valley Mass Rapid Transit (MRT) Line 1 project.

Gamuda said on Thursday its Q2 earnings fell 12.1% to RM160.11mil from RM182.18mil a year ago. Revenue slumped 19.2% to RN527.43mil from RM653.23mil. Earnings per share were 6.65 sen compared with 7.78 sen.

Its construction division recorded a fall in revenue (including share of joint venture companies’ revenue) and earnings due to the tapering of underground and elevated works of the KVMRT - Line 1 project. 

The property division saw lower earnings and revenue due to the softening of the property market in Malaysia. However, sales from properties in Vietnam continued to improve. 

For the first half, its earnings fell 12.6% to RM321.34mil from RM368.03mil in the previous corresponding period. Its revenue declined to RM1.04bil from RM1.22bil.

“The group anticipates a good performance this year from on-going construction projects and steady earnings from the water and expressway concessions division. However, with the softening residential and non-residential property market in Malaysia, weaker growth for the property division is expected over the coming quarters,” it said. 

On the MRT Line 1, it said overall cumulative progress at the end of February 2016 was 79% completion. The project is on target for Phase 1 completion in December 2016 and full completion by July 2017, with no significant cost overruns so far. 

“Construction continues to achieve significant progress. The installation of rail tracks is progressing well, with 99% progress achieved for the Phase 1 (Northern section) from Sg. Buloh to Semantan. Overall track work installation is 94% completed,” it said.

The underground works package has achieved a progress of 85% at the end of February 2016. 

As for the MRT Line 2, it said the final railway scheme was approved on Oct 7, 2015. Five advance works packages have been awarded. Another sixteen tenders, which includes four main viaduct packages, are under way. Two of the main viaduct packages are expected to be awarded in April, with another two slated for mid-2016.  

As for the Penang Transport Master Plan (PTMP), it said that on Aug 14, 105, its 60%-owned SRS Consortium received a letter of award (LOA) from the Penang Government appointing SRS Consortium as the project delivery partner for the implementation of the plan.

The two major components of the PTMP are the Light Rail Transit (LRT) from George Town to Bayan Lepas (Penang International Airport) and the Pan Island Link (PIL) highway.

“The environmental and social impact assessment studies are well under way and are due to be completed by mid-2016. The Penang State Exco for TMP approved the alignment of the PIL in December 2015, and the LRT in January 2016 respectively. 

“Discussions on the scope, terms and conditions of the project delivery partner agreement is ongoing and the agreement is expected to be executed by June 2016,” it said.

Gamuda said the property division sold RM385mil worth of properties in the first half of this year, a 28% drop from the RM535mil a year ago due to the weak Malaysian property market especially the Iskandar Johor Region. Unbilled sales at the end of the current quarter were RM1bil,” it said.  
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