Mission News

Gamuda thrives on Mid-East jobs

10 October 2006 1 views

Petaling Jaya (Malaysia): Analysts are upbeat on Gamuda Bhd’s future earnings, driven by its prospects in the Middle East, where the company has bagged three major projects via joint ventures.

 

The construction giant is building the new Doha International Airport worth a total of RM2.7bil in three-way joint venture (JV) contract; the Dukhan Highway in Qatar worth RM784mil in a JV with WCT Engineering Bhd; and the Sitra Causeway Bridge in Bahrain worth RM640mil.

 

A Gamuda-WCT JV was also looking to bid for projects in Oman, in particular infrastructure works related to the Al Duqm Port, Mayban Securities said in a research note yesterday.

 

“Gamuda has increasingly looked for Middle East jobs after its proposed project with MMC Corp to build a RM14.45bil high-speed train network along Peninsular Malaysia was postponed,” its analyst Saifuddin Morat said in the note.

 

According to Saifuddin, Gamuda’s need to augment its current order book of RM4.1bil had been the main driver for the company's expansion to the Middle East.

 

Gamuda’s share price, he said, was also trading at a slight discount to its construction peers such as IJM Corp Bhd in terms of earnings for the financial year ended July 31.

 

The research house also sees substantial upside in the stock, taking into account its revised forecast earnings for financial year 2007.

  

It was reported on Monday that a Gamuda-led consortium has been pre-qualified to bid for the US$2bil north-south link rail project in Saudi Arabia.

  

Another local research house yesterday said this was encouraging news, as it would help strengthen Gamuda's position in the Middle East and support its construction earnings, going forward, if the bid was successful.

 

The north-south link, which will be the largest ever rail project in the Middle East, will be divided into four main contracts involving earthworks and bridges, ballast and track installation, covering 2,400km.

 

The rail link will connect mineral mines at Al-Jalamid and Al-Zabira in the kingdom’s north and north-east respectively, with processing facilities in the port city of Ras Al-Zour in the east.

 

The link is slated to position phosphates and aluminium industries as the new economic pillars of Saudi Arabia.

 

By: LOONG TSE MIN

 

Source : The Star Online

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