GAMUDA 2009 RESULTS DISAPPOINTING

GAMUDA's Revenue rose 23% y-o-y in 1HE Jan 2009 but Net Profit contracted 42% y-o-y. OSK RESEARCH in a paper reported in THEEDGEDAILY.COM on Mar 30, 2009 said that " .... In light of the disappointing results, we further cut our FY09 to FY10 earnings (estimates) by 3.3% to 7.5%, while FY11 remain unchanged ....".

MAYBANK INVESTMENT BANK also reduced GAMUDA's FY09 Net Profit Forecast by 20%. The construction firm's 1H09 Net Profit of RM104m accounted for 44% of the research house's full-year estimates.

" .... Property development also disappointed, with slower progress billings (which declined 3% q-o-q and 12% y-o-y) and lower Pre-Tax Margin of 17.4% (which decreased 7.7% y-o-y) amid a soft market since FY08 and changes in product mix ...." it said.

Nevertheless, MAYBANK INVESTMENT said consolation against disappointing results was the steady earnings support from water and expressways concessions, which contributed 60% to GAMUDA's PBT.

FOREIGN OWNERSHIP DECLINES
GAMUDA's foreign shareholding had declined 2% month-on-month to 43% at end-Feb 2009.

MAYBANK INVESTMENT said that although GAMUDA's upside might be capped by lacklustre results and downgrades of consensus' high earnings forecasts, its share price downside was limited by a strong asset base to support earnings.

" .... The downside is limited by its water and expressway businesses, which would continue to provide resilient earnings ...." said the research house.