Results Preview Gamuda 2Q net profit seen at RM165m, Maybank says

Results Preview Gamuda 2Q net profit seen at RM165m, Maybank says
Business & Markets 2014
Written by Jonathan Gan of theedgemalaysia.com
Friday, 21 March 2014 12:41

KUALA LUMPUR (Mar 21): Gamuda Bhd's second quarter net profit might have come in at RM165 million, says Maybank Investment Bank Bhd.

Construction firm Gamuda is expected to announce its financials for the second quarter ended January 31, 2014 next Thursday (March 27).

"There is no change to our earnings forecasts; we expect MYR165m net profit in 2QFY7/14 which will lift 1HFY7/14 net profit to MYR330m (+9% YoY) making up 49% of our full-year forecast.

"Our unchanged TP of MYR5.30 pegs the stock to 16.5x 2014 PER," Maybank said.

Maybank said it remained hopeful that the MMC-Gamuda consortium would clinch the project delivery partner role and the tunnel work portion for the Klang Valley Mass Rapid Transit 2 (KVMRT2) project.

On the Selangor water issue, Maybank is of the opinion that negotiations should continue.

“We maintain our view that negotiations on the Selangor water issue should continue until a willing-buyer/willing-seller outcome is reached.

“Invocation of Section 114 of Water Services Industrial Act will send a negative message on the sanctity of contracts. We do believe that there are still options for all parties to explore,” Maybank said.