Top Story : Gamuda – FY07/09 results to meet expectations Underperform
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- We expect Gamuda’s FY07/09 full-year results, due out in the final week of the month, to come in at about RM200m at the core net level (down by about 38% yoy), very much in line with our forecast of RM195m and the market consensus of RM206m.
- Taking the cue from the still sub-par construction margins of a mere 2.1% recorded by IJM in its recently announced 1QFY03/10 results, we do not expect Gamuda’s construction margins to improve significantly from 3.2% it achieved in the preceding quarter.
- Between 4QFY07/09 and 3QFY07/09, average prices of crude oil and billets (that are good proxies to key inputs such as diesel and steel bars) went up by 41% and 10% respectively. We believe higher input costs are likely to have offset savings from Gamuda’s continued efforts to optimise its construction operation
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