Posted by Hafid > 2018-10-08 21:01 | Report Abuse

In my view in the end there is only few local players who can compete and I don’t believe Gamuda will be cut out from the project.

Posted by shortinvestor77 > 2018-10-08 21:02 | Report Abuse

https://www.freemalaysiatoday.com/category/nation/2018/10/08/mmc-gamuda-termination-of-mrt2-contract-will-leave-20000-jobless/

Posted by Victor Yong > 2018-10-08 21:08 | Report Abuse

Gamuda is a reputable and competitive company even Singaporean company partnered with gamuda to do property development in Singapore :)

KUALA LUMPUR (Sept 18): Gamuda Bhd confirmed the tender submitted by its wholly-owned subsidiary Gamuda (Singapore) Pte Ltd, jointly with Evia Real Estate Pte Ltd for a 51,411.9 sq m (5.14ha) land parcel Singapore's Anchorvale Crescent site, has emerged as the highest bid at S$318.89 million (RM963 million).


In a statement to Bursa Malaysia today, Gamuda said Singapore's Housing & Development Board (HDB) had on Friday (Sept 14) announced the provisional tender results, after the tender closed on that day.

The land has been earmarked for a planned executive condomimium development, the statement said.


Gamuda said: "The board of directors of Gamuda Bhd wishes to inform that the tender submitted by Gamuda (Singapore) Pte Ltd, a wholly-owned subsidiary of Gamuda in Singapore (Gamuda Spore) jointly with Evia Real Estate (7) Pte Ltd (Evia) at a tender price of S$318.89 million (equivalent to RM963.0 million), has emerged as the highest bidder."

"The provisional tender results was announced by the Housing & Development Board of Singapore, after the tender closing date on 14 September 2018. Gamuda will make the necessary announcement on the tender upon receipt of the letter of acceptance, which will be issued by HDB to the successful tenderer, namely Gamuda Spore-Evia Joint Venture in due course," Gamuda said.


At Bursa Malaysia, Gamuda shares rose three sen or 0.88% at 12:30pm to settle at RM3.45. The stock saw 948,200 shares traded. — theedgemarkets.com

Posted by jiunn > 2018-10-08 21:08 | Report Abuse

King of roti canai.....”We will cancel!’ ‘No, no, we are reviewing!’ ‘Decision has been made, we will postpone’. ‘Not postponed, we will go ahead!”......

whatever it is....trade with the TREND and make your profits!!!!

Posted by shortinvestor77 > 2018-10-08 21:10 | Report Abuse

Mr U-turn you meant?

Posted by Lukesharewalker > 2018-10-08 21:15 | Report Abuse

It's confusing times with PH .gov. The indecisiveness is incredible.
LGE should give a press release to clarify this...

Posted by emil > 2018-10-08 21:19 | Report Abuse

US is barreling toward a stock market drop of 50% or more, and there's no way to prevent it....phewww....50% drop!!!

https://www.cnbc.com/2018/10/05/ron-paul-us-barreling-towards-a-recession-and-theres-no-escape.html

Posted by pang72 > 2018-10-08 21:22 | Report Abuse

Market crashing..?

Posted by Fantastico > 2018-10-08 21:24 | Report Abuse

looks about right, Federal Reserve will accelerate the rate hikes for the coming quarters

Posted by turbofast > 2018-10-08 21:38 | Report Abuse

林神这样一砍多少散户受害,烂政府

Posted by pang72 > 2018-10-08 21:40 | Report Abuse

Ya, I m regretted to give him a chance...

Posted by pang72 > 2018-10-08 21:42 | Report Abuse

His thinking is too narrow.
He should think of the impact in totality.
This is not his family business . The decision is not cope in his house.
He can not solve one issue and create 100 issues in the chain...

Posted by pang72 > 2018-10-08 21:44 | Report Abuse

Anywhere , relax and watch the episode ending...

Posted by Victor Yong > 2018-10-08 21:47 | Report Abuse

Without the remaining underground portion , target prices are as follows: :)

08/10/2018 3.00 PUBLIC BANK Price Target
08/10/2018 3.25 KENANGA Price Target
08/10/2018 2.71 AmInvest

Posted by Victor Yong > 2018-10-08 21:47 | Report Abuse

Not the end of the world, tomorrow, news update to be followed :)

Posted by Ron90 > 2018-10-08 21:56 | Report Abuse

tonight LGE sure got phone call and kena bambu again..huhu

Posted by Victor Yong > 2018-10-08 21:59 | Report Abuse

:)

Property Development

The group achieved 50.8% jump in FY18 property sales to achieve record property sales of RM3.6bn, surpassing its FY18 target of RM3.5bn. Overseas project dominated the sales, contributing 2/3 of the total sales with the remaining 1/3 of the total sales generated from local projects.

It has set sales targets of RM4.0bn and RM4.5bn for FY19 and FY20 respectively, driven mainly by township developments at Gamuda Gardens, Twentyfive.7 and Gamuda Cove. The property division is expected to be a new earnings driver, backed to strong growth in property sales, and as margin bottoms out. A 50:30:20 JV between Gamuda (Singapore) Pte Ltd: Ho Lee Group Pte Ltd and Evia Real Estate (8) Pte Ltd has won the tender for a 4.23 acre land parcel at Anchorvale Crescent with a bid price of S$318.9mn. The project which has an estimated GDV of S$650m, is expected to be launched in mid-2020. The indicative selling price is S$1100 to S$1200 psf, with a target PBT margin of 8% to 10%.

Posted by Victor Yong > 2018-10-08 22:02 | Report Abuse

SPLASH, an associate company of GAMUDA, has entered into a conditional share purchase agreement with Air Selangor for the disposal of SPLASH for a cash consideration of RM2.55bn. Gamuda will receive about RM1.02bn cash from the disposal of SPLASH. Sales proceeds will be used to pare down borrowings.

Posted by cooling > 2018-10-08 22:03 | Report Abuse

http://www.theedgemarkets.com/article/dont-believe-rumours-ph-govt-will-cancel-all-projects-approved-bn-govt

Posted by Victor Yong > 2018-10-08 22:04 | Report Abuse

For Penang Transport Master Plan, the Federal Government has given approval-in-principle for the LRT project, subject to some modifications. Gamuda maintains in target to secure all approvals by end-2018.

Posted by JN88 > 2018-10-08 22:17 | Report Abuse

Gamuda ady offer 2.3billion reduction.

In the statement, they willing to reduce to support government fiscal.

From this two point you can see how they are willing to work well v GOV link project.

Posted by Nelson Tang > 2018-10-08 22:23 | Report Abuse

如果我是gamuda我的对策，我会宣布裁员，并尊重政府决定停止一切工程，根据合约已经终止了，员工也必须遣散。。。必要时期必须使用极端手段

Posted by JN88 > 2018-10-08 22:23 | Report Abuse

Kenanga: 9:05am published on 8 OCT 2018

Gamuda Berhad - MRT2 Tunnelling Works Terminated

Wakakakakakakakkaka all play by this Big Shark wei.....

Posted by JN88 > 2018-10-08 22:26 | Report Abuse

We choose GAMUDA as our Top Pick, amidst the negative sentiment in the construction sector arising from uncertain prospects and cost reviews of mega infrastructure projects, as we believe that the negatives have been priced in. Currently, it is trading at FY19E PER of 9.9x which is below its 5-year -2SD level with a dividend yield of 3.6%. Maintain OUTPERFORM, with an unchanged SoP-driven Target Price of RM4.30.

Water matter resolved. In the recent FY18 results, GAMUDA booked in RM304.4m non cash flow impairment from SPLASH and Gamuda Water as they concluded their disposal of SPLASH to Selangor state government, while Gamuda Water continues to maintain the water- treatment plants in Rasa and Bukit Badong at lower re-negotiated rates (refer overleaf for details). However, we are positive with the resolution as they would be able to use the cash proceeds to pare down debts, which would lower its net gearing to 0.4x level and Selangor state had agreed to pay 90% of Gamuda Water’s long due receivables.

MRT2 cost review. Currently, GAMUDA is working closely with the government in effort to bring down the cost for MRT2. The review is taking longer than expected and we have no confirmed quantum on how much the project will be scaled down. However, based on our sensitive analysis, an RM8b reduction in contract size down to RM23.0b (from RM31.0b originally) will only result in a 4.4% reduction in FY19E CNP (refer overleaf for sensitivity analysis); substantial risk to earnings is when the reduction is more than RM8.0b.

Strong property sales. In FY18, GAMUDA achieved RM3.6b in property sales (local: 32%, overseas: 68%) bringing its unbilled sales to RM2.3b, which is sufficient to help them weather through the uncertain times, cushioning the impact from construction earnings downside due to cost review on MRT2. Going into FY19, management is targeting sales of RM4.0b as they are optimistic with their new projects, i.e. Gamuda Cove, Gamuda Gardens, and Twentyfive7 which have received encouraging responses from the market. To recap, they recently won a land tender from Singapore Housing Development Board for the development of Executive Condo (EC) in Anchorvale with an estimated GDV of RM2.0b, which we are positive, as the demand for EC remains resilient.

Estimates unchanged. No changes to our FY19-20E earnings for the time being, pending the outcome on MRT2’s cost review. Note that we do not expect GAMUDA to win any big jobs in FY19 until the cost review for MRT2 is concluded.

Maintain OUTPERFORM. All-in, we believe that most of the negative events for GAMUDA, i.e. MRT2 cost review and potential delay in MRT3 have been priced in. At current level, GAMUDA is trading at FY19E PER of 9.9x which is below is 5-year -2SD level. Hence, we believe that negatives for the stock have been well priced in and it is currently a good opportunity for bottom fishing. Maintain OUTPERFORM with an unchanged SoP-driven TP of RM4.30, which we have yet to factor in the potential from Penang Transport Master Plan. Our SoP-TP implies FY19E PER of 12.8x.

Risks to our call include: (i) unexpected delay of MRT2 project, and (ii) higher-than-expected input costs, and (iii) lower-than-expected property sales.

Source: Kenanga Research - 03 Oct 2018

Posted by JN88 > 2018-10-08 22:27 | Report Abuse

Yesterday, MOF announced that they are terminating GAMUDA-MMC JV as the main contractor for the tunnelling works. Negatively surprised, we reduced FY19-20E earnings by 33-32%. Downgrade to MP, with a lower SoP-driven TP of RM3.25 (previously, OP; TP: RM4.30). Our TP implies FY19E PER of 14.3x above KLCON’s 5-year average of 13.4x, which we believe to be fairly valued. Following our downgrade in earnings, call and TP, GAMUDA is no longer our Top Pick for 4Q18.

News. Yesterday, the Ministry of Finance (MOF) announced that they are terminating GAMUDA-MMC JV as the main contractor for the MRT2 tunnelling works valued at RM16.7b. Recall that the JV was awarded the contract back in 2016. For the remaining c.70% works, the government will call for an international tender to participate in the project.

Negatively surprised. The news is a negative shock to us as we never expected the government to terminate this contract as a termination might result in a hefty compensation to the contractors. However, we are unable to confirm on the potential compensation; further details still pending from management.

Hoping for the best. While we believe that international parties could be interested to participate in the tendering process for the remaining works, we believe that GAMUDA-MMC JV would still have an edge over potential bidders given that their machineries are already in place coupled with their strong track record in dealing with the underground rock formation in Kuala Lumpur due to their past experience with MRT1 and SMART Tunnel. Furthermore, GAMUDA-MMC JV had set up the Tunneling Training Academy (TTA) and the TBM Refurbishment Plant; both substantial investments for sustainable human capital, which they are expecting to have 1,000 skilled Malaysian tunnel workers by the end of MRT2 tunneling works.

Outlook clouded by more uncertainties. After factoring this termination of MRT2 tunneling works, its outstanding order-book will be significantly reduced to c.RM0.5b from RM6.0b, with its outlook highly dependent on its property division (property unbilled sales of RM2.3b which provide 1-2 years of visibility) and its infrastructure division, which consists of toll roads.

Earnings cut. We slashed our FY19-20E earnings down by 33-32% as we removed the tunneling portion of MRT2 from our earnings model while reducing our margin assumptions for the elevated portion from 6% to 4%.

Downgrade to MARKET PERFORM. Following the unexpected termination of MRT2 tunneling works, we downgrade GAMUDA to MARKET PERFORM (previously, OUTPERFORM and Top Pick) as we lowered our SoP-driven Target Price to RM3.25 (previously, RM4.30) after factoring the loss of MRT2 tunneling works coupled with a lower 10.0x FY19E PER ascribed to its construction division (previously 14.0x). Our TP implies FY19E PER of 14.3x above KLCON’s 5-year average of 13.4x, which we believe to be fairly valued. Following our downgrade in earnings, call and TP, GAMUDA is no longer our Top Pick for 4Q18.

Risks to our call include: (i) cancellation of toll concessions, and (ii) higher-than-expected input costs, and (iii) lower-than-expected property sales.

Source: Kenanga Research - 08 Oct 2018

Posted by gsi723 > 2018-10-08 22:28 | Report Abuse

LGE become flip flop King... Apa dah jadi? Re-International tender, nice to hear only...

Posted by Lukesharewalker > 2018-10-08 22:40 | Report Abuse

PE 12 is RM2.05
PE10 is RM1.71

Posted by Victor Yong > 2018-10-08 22:40 | Report Abuse

KWSP, KWAP, ASB, ASB2, ASM, ASW2020, PNB, TH, AS1M..are shareholders of gamuda.

Cabinet will reconsider, I guess :)

Posted by JN88 > 2018-10-08 22:48 | Report Abuse

Who dare to tender the current project?? hahaha ....later suddenly said cut cost, no money.... die fast..... no one dare to deal we current gov....every day say no money

Posted by skyslides > 2018-10-08 22:48 | Report Abuse

just get out, wait till it stabilize again

Posted by Victor Yong > 2018-10-08 22:54 | Report Abuse

Cabinet will reconsider, so many stakeholders involved :)

MMC Gamuda: Termination will lead to job losses, flood of lawsuits
8 Oct 2018, 6:29 pm (Updated 8 Oct 2018, 10:00 pm)


The termination of MMC Gamuda as the contractor for the RM16.71 billion underground portion of the MRT2 project would result in immediate job losses, said the firm.

In a statement this evening, MMC Gamuda said this would affect over 20,000 personnel involved in the underground works from a supply chain of more than 600 Malaysian companies.

“Of the 20,000, over 3,000 are made up of MMC Gamuda JV staff, and of this, more than 60 percent are bumiputera.


“This will cause unnecessary hardship to a significant number of Malaysian workforce in an already slowing market.

“In addition, the termination will unjustifiably expose the firm to a flood of lawsuits from terminated employees, sub-contractors, suppliers, manufacturers, etc, whose contracts will similarly be terminated due to no fault of theirs,” it added.

With regard to the international re-tender exercise intended by the Ministry of Finance (MOF), MMC Gamuda said unless MOF significantly lowers the requirements, only foreign contractors would be eligible.

“The award will invariably be given to a foreign contractor who in turn will use experienced staff from their own countries,” it added.

Yesterday, Finance Minister Lim Guan Eng (photo) announced that the underground portion was cancelled after Putrajaya and MMC-Gamuda could not reach an agreement.



Malaysiakini reported that the government would have to fork out RM16.71 billion in compensation due to the cancellation.

However, MMC Gamuda said that apart from the minister’s press release, it had not received any communication from MRT Corp, and thus have no official confirmation that they had been terminated.

Supports government’s austerity measures

The joint venture between the two construction giants Gamuda Bhd and MMC Corporation Bhd said it is in support of the government’s austerity measures and had been in negotiation for two months to strike a compromise on the cost reduction.

It said the incomplete portion of the underground works is currently valued at RM9.6 billion, and the MMC Gamuda is offering to reduce it by RM2.3 billion (24 percent).

This would be done by reducing the number of stations from ten to six, as well as reducing the scope of works and specifications of the stations.

However, it said although the MOF has informed that a RM2.3 billion cost reduction is inadequate, the government has not conveyed the cost reduction target it has in mind.

“If the target figure is made known together with the component of the savings as individual items, both parties would be placed in a better position to re-examine these components from where savings could be derived and narrow the differences […]

“MMC Gamuda remains open to further discussion with MOF and is amenable to cooperate with MOF in reaching an agreeable reduction. Our perception of the latest cost gap is that it is an amount which is not unbridgeable.

“MMC Gamuda believes that MOF’s aim of achieving savings is best done by both parties reaching an acceptable compromise instead of terminating the contract and re-tendering the remainder of the underground works,” it said.

It added that when the project was awarded in 2016, MMC Gamuda was one of five companies that passed pre-qualification and is the only local company to do so. MMC Gamuda’s bid was selected by MRT Corp’s consultant as the winning bid because it had the highest technical score amongst the five contractors as well as the lowest price.

The overall price of RM15.47 billion for the underground portion of the MRT 2 project was even lower than the pre-tender estimate prepared by the consultant, it said.

It added that the high cost of the project is primarily driven by two factors: The higher scope and specifications compared to the MRT 1 project including the complex geology of the work sites, and safety requirements.

For example, it said the scope calls for larger floor spaces and a fivefold increase in the number of underground entrances and pedestrian walkways.

It said MMC Gamuda had offered cheaper alternatives during the initial tender process that do not compromise the work’s safety, performance, and functionality, but MRT Corp rejected the proposal.

“These reductions currently on offer to MOF include some of these alternatives but only those applicable to the balance of the underground works."

Meanwhile, it said geological challenges of the MRT2 work sites mean there is a high risk of sinkholes, and stringent safety requirements cannot be relaxed in order to ensure that insurers would insure the project.

Posted by Victor Yong > 2018-10-08 22:55 | Report Abuse

It said this is why it needed to deploy 12 tunnel boring machines for the project, ten of which are variable density tunnel boring machines specifically developed to mitigate the risk of sinkholes. This in turn drove up the cost of the project, partly due to works necessary prior to tunnelling.


As for the government’s claim that MMC Gamuda would have offered further cost reductions, the company said this claim is premised upon a review conducted by a local engineering firm appointed by MOF.

It claimed MMC Gamuda’s technical staff refuted a significant part of the review’s findings on technical grounds as being too simplistic and arising from lack of relevant experience.

It said MRT Corp has a large staff of experts in relevant fields, and its Aug 27 report on the review’s findings were similar to MMC Gamuda’s views.

It said the company had urged the MOF on Aug 8, Aug 21, and Sept 24 to appoint an international consulting firm with relevant experience to conduct another review, and this could have helped MMC Gamuda and the government reach a compromise.

Posted by hollandking > 2018-10-08 22:56 | Report Abuse

I support gomen cut cut cut. Is good cut. What need to be cut must cut

Posted by hollandking > 2018-10-08 22:56 | Report Abuse

Just bcoz the cut will cut u doesnt mean is not a good cut

Posted by KLCI King > 2018-10-08 22:57 | Report Abuse

After the change of Government, bad news were expected more than good news. The drop was expected, but only realised now. Nothing to be surprised.

Posted by shareinvestor88 > 2018-10-08 23:03 | Report Abuse

Sell n Run fast TP 1.00

Posted by Dcmh > 2018-10-08 23:07 | Report Abuse

New contractor take over also will engage the same staffs and workers

Posted by Dcmh > 2018-10-08 23:09 | Report Abuse

Expected but not so soon . Lesson learn do not load heavily to fund ge 14 channelling money thru banks all traceable

Posted by Cindybull > 2018-10-08 23:11 | Report Abuse

I thought previous Govt is bad didn't expect the current one worst. LGE by far the worst finance minister I ever see in my 65 years of life my

Posted by Cindybull > 2018-10-08 23:12 | Report Abuse

He is not only not capable he know nothing about economy He is just good at holding a milo tin and beg for money this dog shall be out pin

Posted by Cindybull > 2018-10-08 23:12 | Report Abuse

soon

Posted by Cindybull > 2018-10-08 23:14 | Report Abuse

prata king give instruction to him this Dog he have to obey no principle no direction. anyway Gamuda won't die la..12 % for the passed 10 years even during crisis I will continue to support but this ph gov't can die change or ask jib back to manage the country if they don't know how to

Posted by Cindybull > 2018-10-08 23:15 | Report Abuse

only good at blame this and that but no capable at all..hopeless

Posted by pang72 > 2018-10-08 23:17 | Report Abuse

PD election to vote Ajib better than Anual.
Very disappointed !

Posted by Cindybull > 2018-10-08 23:17 | Report Abuse

local don't support don't use...use oversea? only China can use..Are they dumb or what...give money to Others to earn and let the local job loss and die...what a govt...gamuda should fine them till die this hopeless LgE

Posted by Dcmh > 2018-10-08 23:26 | Report Abuse

11bil project topped up 6.7bil into whose pocket?

Posted by Dcmh > 2018-10-08 23:28 | Report Abuse

Like no government previously blame on limestones cavities underground

Posted by CharlieSim > 2018-10-08 23:28 | Report Abuse

LGE or PH gov is making a mistake here... shouldn't simply terminate contract in the name of costs cutting... never really think about consequences... aiyoyo...

Posted by gsi723 > 2018-10-08 23:29 | Report Abuse

China already go Holland with ECRL, still bid?

Posted by CharlieSim > 2018-10-08 23:30 | Report Abuse

now which Construction Company has confidence in PH gov? simply do things...