IJM Q3 earnings hit by lower contributions, forex loss

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PETALING JAYA: IJM Corp Bhd saw a 26.73% fall in its net profit in the third quarter ended Dec 31, 2017 to RM101.36 million from RM138.35 million a year ago, due to lower contributions from its property, manufacturing and quarrying divisions as well as foreign exchange losses.

Revenue for the quarter under review fell slightly by 1.9% to RM1.56 billion from RM1.59 billion on the back of lower contribution from the construction, manufacturing and quarrying divisions.

IJM is expecting a reasonable performance for the current financial year.

With an outstanding orderbook of RM9.3 billion coupled with the implementation of on-going domestic infrastructure projects as well as a healthy pipeline of new large public infrastructure projects spurred by government initiatives, IJM expects continuous growth for the construction division.

“The local property market is expected to remain challenging as, although consumer sentiments have improved, the key issues of price unaffordability, the overhang of high-rise homes, rising cost of living and tight financing will continue to have a dampening effect. Nonetheless, the property development division will remain steadfast to grow its business in view of the strategic locations of its properties and the brand premium that it has established. With unbilled sales of about RM1.9 billion, the division is expected to maintain a satisfactory performance in the current financial year.,” its board of directors said.

Despite a challenging operating environment both domestically as well as overseas, the group’s Industry division expects continued growth by leveraging on the increased construction activities in Malaysia whilst supported by its healthy and strong order book position,” it added.

As for its tolls and ports operations, IJM said it will continue to provide recurrent revenue streams as existing concessions mature, which in turn will enhance the group’s earnings for its infrastructure division.

The plantation division is expected to display lower performance due to the volatile commodity prices, foreign exchange rate and higher borrowing cost.

“Notwithstanding the recovery of crop production in the Malaysian operations and the higher crop production from the increased young mature areas in the Indonesian operations, the group continues to be affected by the start-up yields whilst incurring full plantation maintenance and overheads,” the board said.

Its net profit for the cumulative period of nine months fell to RM338.62 million from RM417.76 million.

Revenue for the period grew to RM4.26 billion from RM4.39 billion in the previous financial year.

IJM’s shares gained 2.11% to close at RM2.90 with some 2.11million shares traded.

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