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IJM Corp returns to the black

KUALA LUMPUR (May 30): With improvements across all its key divisions, IJM Corp Bhd has returned to the black in 4Q ended March 31, posting a net profit of RM84 million compared to a net loss of RM24.34 million a year earlier, which was plagued by provisions in the construction division.

Revenue rose 14% to RM1.2 billion while earnings per share (EPS) were 6.08 sen versus loss per share of 1.8 sen previously.

For the full year ended March 31 (FY12), IJM Corp's net profit grew 34.4% to RM409.1 million, or 29.84 sen a share, while revenue gained 21.5% to RM4.52 billion. It declared a single tier second interim dividend of eight sen per share, bringing the total dividend payout to 12 sen per share for FY12.

"The group's pre-tax profit [for the full year] increased 21.5% with higher profits recorded by the construction, industry and plantation divisions while the property and infrastructure divisions were affected by the non-recurrence of a RM63 million capital gain in the previous year and unrealised foreign exchange losses for FY12 respectively," it said.

For FY12, IJM Corp's construction division saw better performance due to major projects "reaching full swing" while works for some projects have accelerated. It added that the division has turned around from a loss of RM79 million in FY11, caused by a significant one-off impairment provisions made after adopting FRS 139 accounting standards, to a profit of RM62 million in FY12.

While its wholly-owned toll concessions in Malaysia and India saw higher toll collection, the group's infrastructure division registered lower profits due to provisions for major maintenance and unreleased foreign exchange losses.

At the group's listed property arm IJM Land Bhd, 4Q net profit came in 26.8% higher to RM55.77 million while revenue rose 11.3% to RM366.1 million. For FY12, IJM Land's net profit fell 11% to RM193.7 million due to a one-off gain of RM62.95 million in FY11 from the disposal of a subsidiary, while revenue rose 3.8% to RM1.2 billion. IJM Land declared a single tier interim dividend of four sen per share.

IJM Corp's listed plantation arm IJM Plantations Bhd's 4Q net profit fell 73.3% to RM7.07 million due to higher field upkeep maintenance activities and reduction in palm products inventory. "In addition, an impairment in respect of the co-generation plant of a loss-making subsidiary amounting to RM11 million was recognised during the quarter," it said.

Revenue rose 36.2% to RM134.7 million while basic EPS was 0.88 sen versus 3.23 sen.

For FY12, IJM Plantation's net profit grew 6.9% to RM157.3 million while revenue expanded 16.6% to RM590.4 million. It declared a single tier interim dividend of 10 sen per share.

Moving forward, IJM Corp said its construction division is expected to improve as local projects gain momentum. "Order book has been boosted by the recent procurement of Package V5 of the Sungei Buloh-Kajang My Rapid Transit (MRT) line and replenishment prospects remain encouraging," it said.

It added that its property division has strong unbilled sales of over RM1 billion and expects to launch new projects this year. For the plantation segment, it said: "Assuming the current level of palm product prices maintain, the plantation division expects a satisfactory level of profitability".

However, it noted that uncertain foreign exchange fluctuation and higher finance costs and amortisation of new toll concessions in India may dampen the infrastructure division's results.

This story appeared in The Edge Financial Daily on May 30, 2012.

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