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IJM Corp 2Q net profit triples, pays 2 sen dividend

KUALA LUMPUR (Nov 26): IJM Corp Bhd's net profit more than tripled to RM70.1 million for the second financial quarter ended Sept 30, 2019 (2QFY20) from RM21.92 million a year ago, on improved earnings from the property development, manufacturing and quarrying, plantation and infrastructure divisions. 

This resulted in a higher earnings per share of 1.93 sen for 2QFY20 compared with 0.6 sen for 2QFY19.

Revenue for the quarter rose 20.2% to RM1.57 billion from RM1.31 billion a year ago.

The group also declared a first interim dividend of 2 sen per share for the financial year ending March 31, 2020 (FY20), payable on Dec 27.

The strong quarterly performance lifted the group's net profit for the cumulative six months (1HFY20) by 53% to RM129.53 million from RM84.68 million a year ago, while revenue increased 13.2% to RM3.12 billion from RM2.75 billion in 1HFY19.
 
On prospects, IJM Corp expects the current financial year to be satisfactory.

However, it warned that the construction division continues to be impacted by 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 RM5.1 billion," it said in a bourse filing today.

And although consumer sentiments have improved, the key issues of price affordability, overhang of highrise properties, rising cost of living and tight financing arrangements will continue to have a dampening effect on the local property market.

In view of the strategic locations of its properties and the brand premium that has been established and given the potential conversion of unbilled sales of about RM1.9 billion, IJM Corp said the property development division is expected to maintain a satisfactory performance in the current financial year.

As for its industry division, the group expects a challenging year, given the competitive domestic and overseas environment in which it operates.

The plantation division, meanwhile, continues to face cost pressures arising mainly from wage increases, and the impact of the volatility of foreign exchange rates particularly that of the rupiah against the US dollar and yen, said IJM Corp.

It added that current commodity price levels and anticipated better crop production from both the Malaysian and Indonesian operations for 2HFY20 are expected to contribute to an improved performance.

"The group’s toll and port operations continue to provide recurrent revenue streams as existing concessions mature and thereby further enhancing the earnings of the infrastructure division." 

IJM Corp shares closed down 3 sen or 1.42% at RM2.09, with 8.97 million shares done, bringing a market capitalisation of RM7.61 billion.

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