Gamuda shares boosted by RM1.77bil contract win

KUALA LUMPUR: Shares in Gamuda Bhd rose in early trade Thursday after securing a RM1.77bil (S$510mil) job to design and construct the West Coast station and tunnels for the Singapore Land Transport Authority (LTA).

The engineering company added two sen, or 0.45% to RM4.43 with 1.19 million shares traded. Year-to-date, the counter has risen 17.5%.

This station is integral to the 15km Cross Island Line phase two (CRL2), featuring six stations and marking Singapore’s eighth mass rapid transit line.

Gamuda said the project is its first independent venture in Singapore without joint-venture partners and its third infrastructure project in the country.

The construction works are expected to start in the first quarter of 2024, with passenger service for CRL phase two targeted to commence in 2032.

TA Securities said with the new job win in Singapore, Gamuda’s outstanding construction order book jumped to another record high of RM25.8bil.

“This robust outstanding order book can provide earning visibility up to FY28,” it said.

Separately, Gamuda posted a net profit of RM195.04mil, or earnings per share of 7.26 sen in the first quarter ended Oct 31 (1Q24), compared with RM1.17bil, or 45.32 sen in the same quarter last year.

Revenue, however, surged to RM2.8bil from RM1.3bil a year ago.

“Excluding gain on disposal of investment property of RM6.7mil and gain on foreign exchange of RM1.3mil, Gamuda’s 1Q24 core profit of RM187.0mil came in within our expectations but below the consensus forecast, accounting for 20.2% and 18.4% of ours and consensus full-year estimates,” TA said.

MIDF Research said Gamuda’s 1Q24 core net profit of RM195.0mil came in at only 18% and 19% of its full-year forecast and the full-year consensus estimate, respectively.

"We still deem the results in line with the expectations of stronger construction progress and margins in the coming quarters and lumpy property earnings towards the end of the FY," it said.

MIDF has maintained its forecasts, target price of RM5.45 and “outperform” rating.

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Gamuda , construction , Singapore , order book


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