Greater earnings visibility from Gamuda’s RM1.97bil job win

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KUALA LUMPUR: Gamuda Bhd‘s contract award from Pengurusan Air Selangor valued at RM1.97bil is anticipated to offer even higher earnings visibility to the development participant over the following three years, mentioned MIDF Research.

According to the analysis agency, the contract offers an added increase to the group’s excellent orderbook, which had already supplied earnings visibility till FY26.

“Taking into consideration our conservative revenue margin estimates of 5%, this water therapy plant undertaking is anticipated to ship a further RM32.8mil in web revenue yearly till FY25,” it mentioned in a report.

Kenanga, which has pegged Gamuda as its prime building sector decide, maintained its FY22-24 earnings estimates on the inventory and goal worth of RM4.02.

“Our sturdy conviction in Gamuda lies in its big presence in Australia with initiatives amounting to 59.2% of its present excellent orderbook and the prospects of it securing extra initiatives within the Land Down Under.

“Locally, our optimism lies in its means with associate MMC to clinch the most important MRT3 bundle, the CMC303, which we estimate to be RM14.29bil,” it mentioned.

The analysis agency additionally mentioned it’s optimistic that Gamuda’s margin safety measures, which embrace value escalation clauses for its contracts, will mitigate the fluctuations in uncooked supplies costs.

“During Gamuda’s 3QFY22 earnings name final Wednesday, administration guided that the spike in prices by way of

uncooked supplies, labour and gasoline has minimal impression to its margins,” it mentioned.

In different developments, MIDF is wanting ahead to the sale of Gamuda’s freeway concession to Amanat Lebuhraya Rakyat, more likely to be accomplished in august.

The sale will see Gamuda reward its shareholders with a bumper dividend of about 38 sen per share, in addition to strengthen its web money place to north of RM1bil from the present debt stage of RM1.1bil.



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