IJM Corp net profit almost doubled to RM199.3m in 2Q

KUALA LUMPUR: IJM Corporation Bhd (IJM Corp) has posted a net profit of RM119.3 million for its second quarter (2Q) ended Sept 30, 2010, almost double its net profit of RM67.06 million a year ago on higher crude palm oil prices and foreign exchange translation gains of RM31 million in its infrastructure division, it announced to Bursa Malaysia on Tuesday, Nov 23.

The growth in net profits was despite a 25%-lower revenue of RM785.5 million this quarter compared with RM1.05 billion, mainly due to its construction, property and industry divisions.

Contributions from its construction division shrunk due to delays in its projects abroad and substantial completion of major construction projects in the fourth quarter of the previous financial year.

However, it expects new major projects such as the Grand Hyatt in Kuala Lumpur and Besraya Highway Extension projects to go full-swing later in the current financial year ending March 31, 2011.

Meanwhile, revenue from its property division also declined from a year ago as the bulk of its current projects such as "The Light" waterfront development in Penang were only launched recently and thus were still in the early stages of construction.

Furthermore, contributions from its industry division also declined by 19.6% on the back of lower selling prices and deliveries of building materials. However, year-to-date, the group's revenue fell 20% to RM1.77 billion from RM2.21 billion a year ago on the back of higher property margins, higher crude palm oil prices and higher net foreign exchange translation gains in its infrastructure division.

For the next half of the financial year, IJM Corp expected to achieve a satisfactory performance sustained by its new major projects and further replenishment of its construction order book.

The group also expected its property division to contribute more significantly this financial year due to improved consumer sentiments, an attractive mortgage environment and recent successful project launches despite Bank Negara Malaysia's recent move to lower the mortgage cap on third homes.

Its industry division is also expected to recover in the sales of building materials in line with expected growth in construction activity while higher crude palm oil prices bode well for its plantation division.

"Malaysian tolling and port operations are expected to continue to provide steady revenue streams to the group's infrastructure division, but initial expensing of its higher finance costs and amortisation of new toll concessions in India are expected to have an adverse impact on its divisional results," it said.

Its earnings per share rose to 8.86 sen from 5.1 sen a year ago, and it had proposed a dividend of four sen per share.