Gamuda wins RM1.74 bil job to build Sime Darby Property’s hyperscale data centre at Elmina Business Park
24 May 2024 | The Edge Malaysia
Gamuda Bhd said on Friday its wholly owned subsidiary, Gamuda Engineering Sdn Bhd, has secured contracts worth a combined value of RM1.74 billion to build a hyperscale data centre at Elmina Business Park for Sime Darby Property Bhd.

Kuala Lumpur (May 24): Engineering and construction company Gamuda Bhd announced on Friday that it has secured contracts worth a combined value of RM1.74 billion to build a hyperscale data centre for Sime Darby Property Bhd at the latter’s Elmina Business Park.

A day earlier, Sime Property revealed plans to expand its business by constructing a hyperscale data centre involving a RM2 billion investment. The data centre, set to be completed in 2026, will be leased to Pearl Computing Malaysia Sdn Bhd, a wholly owned subsidiary of Singapore-based Raiden APAC Pte Ltd, for an initial term of 20 years, with options for two additional five-year terms.

In an announcement to Bursa Malaysia on Friday, Gamuda disclosed that its wholly owned subsidiary, Gamuda Engineering Sdn Bhd (GESB), has been awarded a contract worth RM815 million by Sime Darby Property (EBP Asset I) Sdn Bhd, a wholly owned unit of Sime Darby Property. The contract involves the construction, completion, testing, and commissioning of a hyperscale data centre.

The project is set to commence next Monday (May 27) and is scheduled for completion on Feb 27, 2026.

Additionally, GESB has secured a separate contract from Pearl Computing Malaysia for the fit-out, testing, and commissioning of mechanical, electrical, and plumbing works for the said data centre in Elmina Business Park 1A, valued at RM928.6 million. This project is expected to start on July 1, 2025, and finish on Sept 9, 2026.

These contracts are expected to contribute positively to the group’s earnings over the next two years, said Gamuda.

“To meet the rising demand for data centre construction, Gamuda plans to ramp up its Next-Gen Digital (Industrialised Building System) IBS production capacity for data centre materials. This strategic move positions Gamuda to capitalise on the significant opportunities,” it said in a statement.

For the six months ended Jan 31, 2024 (6MFY2024), Gamuda’s net profit fell 70.38% to RM403.84 million from RM1.36 billion in the same period the previous year, primarily because the previous year had recognised a gain from the disposal of its highway operations.

Stripping that disposal gain, the group’s continuing operations, consisting of its construction and property businesses, saw a net profit growth of 19% for 6MFY2024 from RM339.61 million, mainly supported by overseas performances.

Gamuda’s revenue surged 123% to RM6.14 billion for 6MFY2024, from RM2.75 billion in the previous corresponding period.

As of the end of January, Gamuda’s total borrowings increased to RM8.14 billion, up from RM6.92 billion at the end of July 2023. Meanwhile, cash and bank balances rose to RM3.72 billion from RM3.04 billion.

Data centre award not a related party transaction

In a separate filing, Sime Darby Property stated that the contract awarded to GESB was the result of a tender process. GESB was chosen for its highest combined score from the final technical and commercial evaluations, reflecting its technical expertise and capability to complete the project.

“The contract was awarded by way of a tender process, whereby 13 contractors with the capability of carrying out and delivering a data centre construction project were invited to participate in the prequalification process for the tender,” said Sime Darby Property.

Although Sime Darby Property and Gamuda are deemed to be related parties by virtue of their common major shareholder — Permodalan Nasional Bhd (PNB) — the award of the data centre project is not a related party transaction because it was awarded by way of a public tender.

AmanahRaya Trustees Bhd-Amanah Saham Bumiputera (ARB) is a major shareholder of Sime Darby Property, holding a direct equity interest of 43.62%, while PNB is connected to ARB and is a substantial shareholder of Sime Darby Property with a 5.5% direct stake.

PNB’s aggregated shareholdings in Gamuda is 14.92%.

Shares of Gamuda closed up five sen or 0.83% at RM6.05 on Friday, giving it a market capitalisation of RM16.78 billion. Sime Darby Property closed at six-year high of RM1.24, valuing it at RM8.43 billion.

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