Gamuda order book gets a timely boost with Aussie contract win

Gamuda has partnered with John Holland to bid for the Suburban Rail Loop (SRL) project that has two tunnelling contracts. The first is between Cheltenham and Glen Waverly, which will be the longest tunnelling package in the history of Victoria, and the second contract from Glen Waverly to Box Hill.(Gamuda workers being trained in tunnelling. - File pic)

PETALING JAYA: Gamuda Bhd’s latest work contract win of RM4.1bil in Australia is expected to boost its earnings by between 2% and 4%.

The Ferrovial Construction Australia and Gamuda Australia Joint Venture (JV) was awarded the RM4.1bil main contract package works for the Coffs Harbour Bypass road construction project on Friday with the Malaysian company holding a half share of the contract.

Planning and detailed design work by Gamuda Australia JV will commence immediately with the bypass expected to be open to traffic from late 2026 with full work completion scheduled for late 2027.

“Assuming a margin of 8%, and Australia base corporate tax rate of 30%, the project will contribute about RM17.2mil in financial year 2023 (FY23), RM29.4mil each in FY24 until FY26, and RM12.3mil in FY27 net profit,” Public Investment Bank (PublicInvest) said in a note yesterday.

The research house kept its order book replenishment assumption of RM10bil for FY22, in line with Gamuda management’s job replenishment target.

Gamuda tunnelling at another project, - File pic

The construction works on the project are slated to begin early next year.

“The group is targeting to double its order book to more than RM20bil by the end of FY23 with its sizable projects, including Island A Penang South Reclamation, which is worth RM4bil to RM4.5bil, and the upcoming MRT 3 project,” PublicInvest added.

Gamuda’s outstanding order book post-win stood at RM12.5bil.

MIDF Research said Gamuda Australia has been shortlisted for the delivery of the northern section of the North East Link in Melbourne.

This is set to be the largest road project in the state of Victoria with the total estimated project cost at about A$16bil (RM49bil).

“Gamuda has been strengthening its foothold in Australia, taking on various infrastructure works. The group won the A$2.16bil (RM6.5bil) Sydney Metro West (SMW) – Western Tunneling Package Project with JV partner Laing O’Rourke in Match,” the bank said.

Gamuda has partnered with John Holland to bid for the Suburban Rail Loop (SRL) project that has two tunnelling contracts.

The first is between Cheltenham and Glen Waverly, which will be the longest tunnelling package in the history of Victoria, and the second contract from Glen Waverly to Box Hill.

The SRL is a 90km orbital line that will connect all major suburban lines.

It will have a total project size of A$50bil (RM153.16bil).

MIDF Research also noted that Gamuda is a strong candidate to benefit from the MRT3 project, which involves 10km of underground works and 6km of elevated works, with an estimated package size worth RM14.29bil.

The research house said Gamuda is now inching a step closer to its aggressive target of doubling its order book to RM20bil to RM25bil this year.

It is also optimistic about Gamuda’s prospects in Australia as it continues to clinch mega projects there.