IJM Corp 1Q net profit up 9% on better construction, property performance

KUALA LUMPUR (Aug 23): IJM Corp Bhd's net profit grew 9% to RM126.4 million or 3.49 sen per share for the first quarter ended June 30, 2017 (1QFY18), from RM115.52 million or 3.22 sen per share in the previous year's corresponding quarter.

Its quarterly revenue grew 12% to RM1.47 billion from RM1.31 billion a year earlier.

The group said it saw profit contribution growth from its construction, property development and infrastructure segments.

The construction segment reported revenue and pre-tax profit growth of 7.9% and 16% respectively, as construction works at some of its major infrastructural projects gathered momentum.

The property development business saw 23% growth in pre-tax profit, boosted by the recognition of unrealised foreign exchange (forex) gain of RM1.3 million during the quarter, versus forex loss of RM9.6 million in the preceding year.

Its infrastructure division increased 29% amid higher cargo throughput, while pre-tax profit more than tripled to RM64.6 million from RM20.8 million.

The manufacturing and quarrying division also reported higher revenue, but pre-tax profit declined 16.2% due to compressed margins amid higher raw material prices and lower volumes in the ready-mixed concrete sector.

The plantation segment's revenue increased 32% amid higher crude palm oil prices and sales volume, while pre-tax profit was down amid unrealised forex loss of RM800,000.

Going forward, IJM said the outlook for the construction division is encouraging, supported by its record RM8.7 billion outstanding orderbook, while the property division is expected to continue to be affected by the tighter lending guidelines.

Its industry division is expected to see continued momentum by leveraging on the heightened construction activities in Malaysia.

Meanwhile, it expects the plantation division to record satisfactory performance on the back of higher crop production from the increasing young mature areas in Indonesia and sustained fresh fruit bunch yields in Malaysia.

"Despite the challenging business environment, based on the above stated factors, the group expects a reasonable performance for the current financial year," it said.

IJM closed down 3 sen or 0.89% at RM3.36, giving a market capitalisation of RM12.19 billion. — theedgemarkets.com

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