KUALA LUMPUR: Shares in Gamuda rose 1.7% in early Wednesday after it announced a set of improved results in its latest quarter.
As at 9.15am, the trading stock in the engineering, construction and property firm was trading 11 sen higher at RM6.62 a share after 740,000 shares changed hands.
For the quarter ending April 30, 2024, Gamuda reported an increase in revenue of 82% to RM3.8bil, compared to the same quarter last year, while net profit rose by 6% to RM236mil.
Gamuda declared a dividend of 16 sen per share for the nine-month period, which was 33% higher than the 12 sen dividend (excluding special dividend of 38 sen) paid in the corresponding financial period.
“This year’s 33% increase in annual dividend reflects confidence in the group’s robust outlook and sustainable growth potential,” it said in a statement.
In its results review, RHB Research noted that the group's construction segment's profit after tax (PAT) margin remained at a low level of 5.1% in 9MFY24 as overseas projects made up about 86% of construction revenue.
Moving forward, RHB expects improved contributions from Gamuda's construction arm as margins gradually trend upwards amid improved contributions from higher-margin local jobs such as the Penang Light Rail Transit (LRT) Mutiara Line and date centre jobs.
"Moreover, the less volatile construction price index in Australia could limit unexpected building materials price escalations for ongoing tenders and upcoming variation orders for the Sydney Metro West-Western Tunnelling Package project," said the research house.
With a half-yearly burn rate of RM5bil for its construction works executed combined with upcoming job wins, Gamuda expects to attain a new construction orderbook level of about RM30bil by end-2024, up from RM24bil as at end-April.
RHB said this would be facilitated by potential wins such as the Penang LRT, which could have a project value of about RM5bil for Gamuda's 60% share in the SRS Consortium.
Other projects could include the Padas Hydrioelectric Dam, which includes a water supply scheme and Suburban Rail Loop East tunnelling package (Glen Waverley-Boxhill), among others.
As for the property segment, RHB expects earnings to be stronger in 4QFY24 due to lumpy recognitions, particularly from West Hampstead in London.
It added that the property arm's unbilled sales had grown to RM6.7bil as at end-9MFY24 from RM5.7bil during the end-9MFY23 period.
RHB maintained its "buy" call and target price of RM7.69 on Gamuda.
