How much profit will Gamuda gain from the new deal?

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Gamuda's Profit Potential in the New Deal

Gamuda, through its 70% stake in the Project Developer (PD) and Turnkey Contractor (TC) joint ventures, is positioned to gain substantial profits from the new deal for Island A. The company will benefit from profits generated by its direct involvement in the reclamation works and additionally from 70% of the net proceeds of the PD and TC. This structure allows Gamuda to effectively "double-dip" by profiting from both the construction activities and the overall project's financial outcomes.
Revenue and Cost Projections for Island A

Under the revised arrangement, land sale proceeds from Phase 1 of Island A are projected to fall between RM8 billion and RM9 billion over a seven-year period. The estimated costs associated with the reclamation are between RM4 billion and RM4.5 billion, with construction expenses estimated to be between RM2 billion and RM2.5 billion. These figures indicate a total estimated cost of RM6 billion to RM7 billion for the reclamation and construction phases.
Net Revenue and Profit Distribution

The net revenue from Island A is estimated at RM2 billion, calculated by subtracting the total estimated costs (RM7 billion, using the higher estimate) from the projected land sale proceeds (RM9 billion). Of this RM2 billion net revenue, the Penang state government is set to receive RM600 million, representing 30% of the net proceeds. This leaves the remaining 70% of the net revenue, amounting to RM1.4 billion, to be distributed among the partners in the PD and TC joint ventures, where Gamuda holds the majority stake.
Gamuda's Financial Upside

Gamuda's financial gain is derived from multiple streams within this new deal. Firstly, the company will profit directly from undertaking the reclamation work itself. Secondly, as the majority owner (70%) of both the PD and TC, Gamuda will receive the larger share of the net proceeds generated after all project costs and liabilities are settled. While the precise quantum of Gamuda's profit is not explicitly itemised, the structure clearly indicates a significant financial upside for the company through its dominant position in the project's development and execution.

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How much profit will Gamuda gain from the new deal?

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