IJM revenue tops RM5b in 9MFY2026 as construction rebound offsets property drag amid Sunway takeover bid

PETALING JAYA (March 4): IJM Corp Bhd posted a 12.4% rise in revenue to RM5.01 billion for the nine months ended Dec 31, 2025 (9M FY2026), supported by a recovery in construction activities and steady demand in its manufacturing and quarrying operations.

However, profit before tax (PBT) declined 33.6% year-on-year to RM354.2 million from RM533.7 million, weighed down by weaker property contributions and higher unrealised foreign exchange losses.

The results come as shareholders assess an RM11 billion conditional voluntary takeover offer from Sunway Bhd at RM3.15 per share.

Financial performance snapshot

For 9MFY2026:

*Revenue rose to RM5.01 billion from RM4.46 billion a year earlier.

*PBT fell to RM354.2 million.

*Net profit declined to RM187.2 million from RM335.2 million.

*Unrealised forex losses widened to RM103.2 million (from RM73.4 million previously).

*Earnings per share eased to 5.05 sen from 7.83 sen.

*Net asset value per share stood at RM2.89 (FY2025: RM2.93).

*A first interim dividend of 2.0 sen per share was paid in January 2026.

Management attributed the earnings contraction partly to currency volatility and softer property sales, while construction and industry divisions showed improved operational momentum.

Construction division gathers pace

Construction revenue for the nine-month period surged 53.7% to RM2.65 billion, driven by stronger work progress across infrastructure, industrial and data centre projects.

Notably, third-quarter construction PBT rose 118.9% to RM42.5 million from RM19.4 million a year earlier, reflecting accelerated progress on industrial developments including the RM2.1 billion Elmina data centre project and the RM1.4 billion NPE Extension.

The group’s outstanding construction order book stands at RM15.3 billion, providing earnings visibility over the medium term.

Analysts said the quarterly improvement suggests that IJM’s pivot toward industrial and fast-track developments is beginning to offset weakness in other segments.

Industry division steady; property under pressure

Revenue from the industry and quarrying segment increased 19% to RM925 million, supported by higher deliveries of piles and ready-mixed concrete.

In contrast, property revenue fell 36.1% to RM823 million. The division recorded a pre-tax loss of RM7.7 million, affected by lower sales and ongoing overhead costs linked to long-term investment assets in the UK and Malaysia.

The infrastructure segment delivered mixed results. Port revenue declined 13.8% due to lower cargo throughput during a key customer’s maintenance period, while tollway operations reported improved profitability.

Analysts divided as takeover bid unfolds

The earnings release comes amid heightened focus on Sunway’s conditional voluntary takeover offer.

Under the terms, Sunway is offering RM3.15 per IJM share via a mixed consideration of 32.5 sen in cash and 0.501 new Sunway shares (issued at RM5.65 each). The offer will close at 5pm on April 6, 2026, and is conditional upon Sunway securing more than 50% of IJM’s voting shares.

If acceptances reach 90%, Sunway intends to invoke compulsory acquisition to delist IJM.

Research houses have adopted divergent positions.

MIDF Research maintained a Neutral call, describing the RM3.15 offer as “fair” at 21.1 times FY2027 forecast earnings. It noted that core earnings of RM70.5 million for the quarter came in below expectations due to property losses and forex volatility, arguing that the offer provides certainty amid sectoral headwinds.

In contrast, Kenanga Research reiterated an Outperform rating with a target price of RM3.40, advising shareholders to reject the bid. It cited the strength of the RM15.3 billion order book and industrial growth trajectory as evidence of higher standalone value.

Maybank Investment Bank retained a Buy call and RM3.20 target price, positioning IJM as a beneficiary of infrastructure spending under Budget 2026. It highlighted improving tollway profitability and stronger construction margins as early indicators of recovery.

Hong Leong Investment Bank (HLIB) maintained a Buy rating with a RM3.05 target price, describing IJM as asset-backed with a net tangible asset base close to the offer price. The house acknowledged near-term earnings pressure but views UK investment costs as front-loaded.

Major institutional shareholders, including the Employees Provident Fund (EPF), which holds approximately 20.5%, have yet to announce their stance and are awaiting the Independent Advice Circular due on March 16.

Strategic repositioning under way

Group chief executive Datuk Lee Chun Fai said the company remains focused on disciplined execution and cost control.

“The construction division expects improved performance in FY2026 supported by our order book. We are prioritising operational efficiency and selective bidding,” he said.

IJM is expanding the use of Industrialised Building Systems (IBS) and digital project management to improve productivity and manage labour costs. The strategy aims to shorten project timelines and mitigate margin pressures from inflation.

In the property segment, management said it is recalibrating launches while focusing on inventory clearance and long-term asset optimisation.

The group also confirmed it is cooperating with an ongoing review by the Malaysian Anti-Corruption Commission (MACC) relating to historical transactions, stating that operations remain unaffected.

Outlook: Standalone recovery or consolidation?

IJM’s near-term direction will likely hinge on the outcome of the takeover offer.

Operationally, the group’s construction and industrial divisions are showing signs of recovery, while property and currency exposures remain near-term drags. The sizeable order book provides revenue visibility, but profit conversion will depend on execution discipline and cost containment.

Whether shareholders opt for the RM3.15 exit or back IJM’s standalone strategy will determine the company’s next phase—independent expansion or consolidation within a larger conglomerate structure.

Editor’s note: Financial data is based on IJM Corp’s unaudited results for the third quarter and nine months ended Dec 31, 2025, as filed with Bursa Malaysia on Feb 26, 2026.

Analyst ratings and target prices reflect published research notes following the results release and the ongoing takeover offer.

Due diligence: Readers are advised to perform independent research before making investment decisions.

Unlock Malaysia’s shifting industrial map. Track where new housing is emerging as talents converge around I4.0 industrial parks across Peninsular Malaysia. Download the Industrial Special Report now.