NEXT For Puncak Niaga ('Like'), Gamuda (More Contracts)

Puncak Niaga: It is among four parties short listed by Petronas for the supply of water pipes to the Pengearng Integrated Complex in Pengerang, Johor. The contracts is worth about rm300 million.

Puncak Niaga has been busy scouting for water related construction jobs. The group has secured rm544 million worth of construction job for 2014.

It is believed that Puncak Niaga stands a good chance of securing the Pengearng job given its expertise in water related construction business. Along with its oil and gas business, its construction arm would help to sustain its earnings as it exits the water concessionaire business upon the completion of Selangor’s water restructuring exercise.

Part of the rm1.55 billion proceeds from the sale of its Selangor water assets are expected to be utilized for the expansion of its oil and gas business. There is also a possibility that Puncak Niaga may venture into the plantation business. As such do not expect the entire proceeds to be dished out as special dividends to shareholders.

Gamuda: It has entered into a share sale agreement with Salak Park Sdn Bhd for the acquisition of the latter’s entire stake in Salak Land Development Sdn Bhd for a total cash consideration of rm784 million.

This is another positive move by the group to improve its bottom line prospects after having increased its stake in Kesas Holdings Bhd whch is the toll concessionaire for the Shah Alam Expressway.

Management is of the view that the proposed acquisition will enable Gamuda to further establish its position in property development and increase its investment property portfolio to provide long term earnings growth.

The proposed acquisition will also increase its undeveloped land bank to 3846 acres.

Currently (Aug 2014) Gamuda has cash in hand of rm1.3 billion and a low net gearing of 0.21 times to finance the acquisition.

Its outstanding order book is more than rm2 billion of which potential order book replenishment from Southern Double Track in 2015 and KVMRT Line 2 in 2016 and strong unbilled property sales of rm1.8 billion.