Gamuda Bhd kicked off FY26 with results that came in within expectations, posting a net profit of RM215.1 million for the first quarter — 16% of Kenanga’s full-year forecast and 15% of consensus estimates. Analysts expect stronger quarters ahead, supported by growing domestic construction activity and resilient property sales in Vietnam. The group also declared a first interim dividend of 5 sen, unchanged from a year ago.
Modest Quarter With Stronger Engineering Margins
Despite a 7% year-on-year drop in revenue, Gamuda’s net profit rose 5% as Gamuda Engineering (GE) delivered stronger contributions. Domestic construction projects, which now make up 41% of group revenue (vs 27% previously), supported margins, while lower-margin Australian projects are nearing completion.
The revenue decline was primarily attributed to a one-off recognition of West Hampstead property revenue in the UK in 1QFY25 that did not recur this year.
QoQ Earnings Softer on Seasonal Slowdown
Quarter-on-quarter, net profit fell 35% from RM332.1 million in 4QFY25, while revenue slid 20%, reflecting typically slower first-quarter construction billings.
Gamuda Land (GL) was the main drag, with segmental PBT plunging 61%. The previous quarter had benefitted from high-margin quick-turnaround projects (QTPs) in Vietnam, such as Eaton Park, which delivered margins in the mid-20% range. Group PBT margin eased to 7.2% from 10.0%.
Key Highlights From Results Briefing
Looking ahead, Gamuda remains on track to meet its RM40–45 billion order book target by end-2025. As of October 2025, the group’s order book stood at RM36.6 billion. GE has now set a more ambitious target of RM50 billion by end-2026.
GL recorded RM846 million in property sales (+34% YoY), with QTPs contributing 56%. Unbilled sales hit RM8 billion, and the FY26 sales target of RM5.5 billion remains intact.
Gamuda also revealed that three new site engagements in Ho Chi Minh City are at final stages, with announcements expected next quarter once agreements conclude.
Net gearing rose to 62% in October 2025 from 53% in July and is expected to climb to 70%, given RM3 billion in planned capex for Vietnam and Singapore in 2026.
Kenanga said it remains comfortable with the rising gearing, citing strong demand in both markets, high-margin QTPs, and structured project financing.
The house maintained its FY26–FY27 forecasts, including job win assumptions of RM22 billion and RM27 billion, and property sales forecasts of RM4.9 billion and RM5 billion. It also kept its SOP-derived target price of RM6.13, valuing Gamuda’s construction arm at 22x CY26F PER — inline with peers IJM and SunCon — and incorporating a 5% ESG premium for its 4-star rating.
Kenanga reaffirmed its OUTPERFORM call.
