PETALING JAYA: Gamuda Bhd
is sharpening its focus on Australia’s rapidly accelerating renewable energy (RE) build-out and estimates its Australia order book may triple to A$8bil by the financial year ending July 31, 2028 (FY28).
In FY25, the Australian order book stood at A$2.8bil.
“We believe that pivoting from infrastructure to RE, which has bigger contract sizes with better margins, is key to hitting Gamuda Engineering’s (GE) revenue targets,” CGS International (CGSI) Research said, in a report, post an analysts’ briefing with Gamuda Australia.
Australia contributed 56% of FY25 revenue for GE and 20% of GE’s total order book of RM38.4bil in July.
“GE estimates that Gamuda Engineering Australia (GEA) and DT Infrastructure’s order book will triple to A$8bil in FY28 in order to hit GE’s broad revenue target of RM25bil by FY28. We think that Australia will likely still contribute 40% to 50% of GE’s revenue in FY27-FY28,” it added.
According to the research house, GE expects the potential Australia pipeline to be A$50bil in FY27-FY29 while the current active tenders amount to A$10bil.
Of the A$50bil pipeline, RE comprises 30%, rail and road infrastructure forms 40% and other civil work at 30%.
GE expects project-level margins to improve to 10%–12% in FY27–FY28, up from 8%to 9% for its current order book.
The uplift will be driven by a higher proportion of early contractor involvement (ECI) jobs, which typically command better margins, participation in higher-margin public-private partnership projects and equity stakes in RE ventures that include engineering, procurement, construction and commissioning packages.
GEA was one of three parties shortlisted to build and operate the new transmission network for the New England RE zone.
Management said some of the RE projects under negotiation are the Cellars Hill Wind Farm and Weasel Solar Farm in Tasmania. This is on top of other ECI projects such as the Capricornia pump hydro, Oven Mountain pump hydro and Carmody’s Hill wind farm.
Going by its pipeline of potential projects and diversified order book spanning Malaysia, Taiwan, Australia and Singapore, CGSI Research kept its “add” call with a target price of RM7.30 on the stock.
RHB Research said with RM39.3bil of balance order book as of end-October and an assumed burn rate of RM1.4bil a month, Gamuda needs RM3.5bil in new contract wins to comfortably meet the lower end of its RM40bil to RM45bil order book target by the end of this year.
