KUALA LUMPUR (Dec 13): IJM Corp Bhd, whose net profit plunged 80.81% to RM21.92 million in the second quarter ended Sept 30, 2018 (2QFY19) from RM114.23 million a year ago, is bracing for a challenging financial year in view of the slowdown in the construction sector and soft property market.
Speaking on the group's outlook at the launch of Pantai Sentral Interchange, its chief executive officer (CEO) and managing director Datuk Soam Heng Choon said "this is time for consolidation", as the construction sector is facing slowdown due to fewer jobs from the government and the property market softens.
Commenting on its earnings growth projection, Soam said: "It depends on the forex (foreign exchange), and (the group) needs to look at core profit and how it (core profit) is affected by the forex or (any) one-off item."
Nonetheless, Soam said the group's total construction outstanding order book of RM8.8 billion will provide earnings visibility for the group in the next three years amid the slowing down of the construction sector.
The group said earlier its 2QFY19 earnings drop was due to lower revenue and higher forex losses.
Revenue for the quarter was down 18.13% to RM1.31 billion from RM1.6 billion a year earlier, as the group's construction, property development, manufacturing and quarrying, as well as plantations divisions posted lower contributions.
For the six-month period ended Sept 30, 2018 (1HFY19), IJM's net profit declined 64.03% to RM84.68 million from RM235.4 million in the previous year's corresponding period.
Revenue in 1HFY19 fell 10.03% year-on-year to RM2.75 billion from RM3.06 billion.
At the midday break, IJM Corp settled higher by two sen or 1.29% at RM1.57, valuing the group at RM5.71 billion. — theedgemarkets.com