IJM Corp 4Q earnings down, declares dividend of one sen

KUALA LUMPUR (June 27): IJM Corp Bhd’s earnings slid 70.4% to RM71.3 million for the fourth quarter ended March 31, 2020 (4QFY20) from RM240.81 million a year earlier, dragged by lower profits across four divisions namely property development, manufacturing and quarrying, plantation and infrastructure.

Earnings per share (EPS) dropped to 1.69 sen from 6.64 sen previously, the group said in its result filing with Bursa Malaysia yesterday.

The company has declared a single tier second interim dividend of one sen for FY20 to be paid on Aug 21. IJM’s total dividend payout for FY20 stood at three sen.

However, the group’s revenue grew 46.7% to RM2.05 billion from RM1.39 billion in the year-ago period, following higher revenue contributed by the construction, property development and plantation divisions.

IJM said its property development business, the group’s biggest revenue contributor, was boosted by the completion of the Royal Mint Gardens in London, UK. However, due to the recognition of impairment of inventories in 4QFY20, pre-tax profit came in 19% lower compared with the preceding year’s corresponding quarter.

On its plantation segment, the group recorded higher fresh fruit bunch production due to the change in the cropping pattern in both the Malaysian and Indonesian operations and larger areas attaining maturity in the Indonesian operations.

“However, the uncertainties in the economic environment caused by the COVID-19 pandemic and the collapse of crude oil prices resulted in the unfavourable currency movement on the US dollar and Japanese yen denominated borrowings, leading to weaker financial performances for the period,” said IJM.

For the full financial year ended March 30, 2020 (FY20), the group’s annual net profit contracted 40.2% to RM250.59 million from RM418.92 million previously. Annual revenue, however, surged 16.8% to RM6.61 billion from RM5.66 billion in FY19.

Going forward, IJM said it anticipates disruptive implications of the pandemic on the overall market environment, together with the uncertainty of commodity prices and volatility of foreign exchange rates. 

Given the constantly changing business environment, the group said it expects the coming financial year to be challenging.

“The group’s tolling operations are expected to be impacted by the pandemic lockdowns imposed in Malaysia and India in mid-March 2020 with the expected gradual recovery of traffic flows back to the pre-COVID 19 levels anticipated to be only after the first quarter of FY2021. However, the group’s port operations are expected to provide recurrent revenue streams and earnings as the existing port concession matures,” it added.

IJM shares settled five sen or 2.7% lower at RM1.80 yesterday with 447,9000 units traded. This gave the company a market capitalisation of RM6.55 billion. Year to date, the stock’s value has fallen 16.67%.

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