IJM Corp 3Q net profit nearly halves

KUALA LUMPUR (Feb 26): IJM Corp Bhd’s net profit nearly halved to RM49.77 million in its third quarter ended Dec 31, 2019 (3QFY19), from RM93.42 million in the year-ago quarter. The steep fall in quarterly earnings were due to lower contribution from across all divisions, including construction, property development and quarrying.

The construction giant also incurred higher operating expenses as well as a bigger share of losses of associates during the quarter under review, its exchange filing yesterday showed.

Quarterly revenue contracted 4.4% to RM1.44 billion, from RM1.51 billion in the corresponding quarter a year ago.

This brings its cumulative net profit in the nine-month period (9MFY20) to RM179.29 million, up a marginal 0.7% from RM178.11 million in the same period a year ago, its exchange filing showed.

Cumulative revenue, meanwhile, was 7% higher at RM4.56 billion, from RM4.26 billion in 9MFY19.

IJM Corp said it expects a challenging year for its construction division in view of the subdued property market and reduced infrastructure spending by the government.

“With reduced availability of new construction jobs in the local market and a more competitive tender environment, the division will remain vigilant and cautious to preserve its earnings while focusing on the execution and timely completion of its existing outstanding order book of RM4.5 billion,” it added.

It also sees a challenging property market although consumer sentiments have improved, but expects the division to maintain a satisfactory performance in the current financial year.

Same goes for its industry division, where IJM Corp sees a competitive domestic and overseas operating environment.

While its plantation division is expected to see reduced crop production in the final financial quarter, and cost pressures mainly from wage increases, IJM said the continuation of the prevailing commodity prices and foreign exchange rates could contribute to an improved performance.

Toll and port operations should provide recurrent revenue streams as existing concessions mature, therefore further enhancing earnings of its infrastructure division, it added.

Shares in IJM Corp finished one sen lower yesterday at RM2.15, bringing a market capitalisation of RM7.8 billion.

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