Petaling Jaya, 29 November 2021 – IJM Corporation Berhad (“IJM” or “the Group”) today released its financial results for the second quarter ended 30 September 2021 (2Q FY2022). Group revenue for 2Q FY2022 declined 24.8% to RM1,075.0 million from RM1,428.7 million reported in the corresponding quarter last year. The Group’s profit before tax (PBT) increased by 336.0% to RM705.6 million in the quarter (2Q FY2021: RM161.8 million). 

CEO & Managing Director of IJM, Mr Liew Hau Seng explained: “The Group’s lower operating revenue in 2Q FY2022 was mainly attributable to the re-imposition of the nationwide lockdown, which had restricted business activities for most of 2Q FY2022. Once Malaysia entered into the National Recovery Plan in mid-August, the Group’s businesses resumed operations, although we saw initial constraints in the supply chain. The Group recorded a sharp rise in the pre-tax profits for 2Q FY2022, primarily due to gains totalling RM639.4 million arising from the disposal of the Group’s stake in IJM Plantations and Kemena Industries.”

As construction site activities were disrupted by lockdowns in the quarter, revenue of the Construction Division declined by 39.5% to RM347.2 million compared to the corresponding quarter last year. PBT also decreased by 81.2% to RM9.6 million mainly due to the lower revenue and net foreign exchange losses of RM0.1 million compared to forex gains of RM4.6 million in the corresponding quarter last year.

The Group’s Property Division reported revenue of RM160.8 million in 2Q FY2022, 37.0% lower than RM255.1 million registered in the corresponding quarter last year mainly due to the lockdown, which had restricted business activities. The Division reported a loss before tax of RM14.8 million in the quarter compared to a pre-tax profit of RM33.1 million a year ago, mainly due to lower revenue and work progress impeded by the lockdown as well as forex losses of RM8.5 million.

The Industry Division, however, saw an increase in revenue of 29.5% to RM210.3 million in 2Q FY2022 from higher deliveries of piles, quarry products and ready-mixed concrete. Following this, the Division recorded a PBT of RM18.5 million in the quarter, 201.4% higher compared to RM6.1 million in 2Q FY2021 on the back of higher gross profit margins coupled with the recognition of the one-off gain arising from the disposal of Kemena Industries.

The Infrastructure Division’s revenue for the current quarter decreased by 31.1% to RM155.5 million mainly due to the lockdown which had caused significant reduction in local traffic volume at the toll highways and cargo throughput at the Group’s Kuantan Port operations. The Division reported a loss before tax of RM8.8 million for the quarter compared to a PBT of RM68.4 million in 2Q FY2021 arising from the lower revenue, coupled with forex losses of RM0.7 million (2Q FY2021: forex gains of RM4.9 million).

The Plantation Division reported a 5.0% decrease in revenue for the current quarter to RM200.8 million mainly due to the deconsolidation of the results of the Plantation Division during the current quarter following the completion of the disposal of the Company’s 56.2% equity stake in IJM Plantations Bhd to Kuala Lumpur Kepong Bhd. Pre-tax profit for 2Q FY2022 increased significantly to RM698.9 million, mainly due to the higher commodity prices coupled with the gain arising from the disposal of IJM Plantations.

Catalysts – new job wins, strong sales momentum and sizeable FDI in Kuantan

As business activities continue to recover, the Group expects its financial performance to gradually improve in the second half of the financial year. With catalysts seen across all business divisions, coupled with a healthy balance sheet (net gearing of 0.25 times), the prospects of the Group are encouraging.

“The outstanding Construction order book currently stands at RM4.51 billion. This includes the three recently secured construction contracts worth RM680 million: Phase 2 of The ERA @ Duta North mixed development by JKG Land Bhd and Jendela Residences by Sime Darby Property Bhd, both in Kuala Lumpur, as well as a factory expansion for Hotayi Electronic (M) Sdn Bhd in Penang. These three awards bring IJM Construction’s contracts won to eight projects worth RM1.34 billion for the financial year. The other major projects secured in the financial year include infrastructure works at Tun Razak Exchange (TRX), Kuala Lumpur, substructure works at the Sungai Pahang Bridge section of the East Coast Rail Link (ECRL) as well as the Mezzo residential tower and master infrastructure packages at The Light City, Penang.”

On the Group’s Property Division, Mr Liew said: “The sales achieved to-date have been encouraging, despite the uncertainties brought on by the Covid-19 pandemic. In the quarter, we registered sales of RM410 million on the back of encouraging take-up of the Group’s property offerings, taking the 1H FY2020 sales tally to RM1.1 billion and puts us on course to exceed the RM1.7 billion sales achieved last year. Just last week, 308 units from IJM Land’s

Robin @ Rimbayu at its award-winning Bandar Rimbayu township were taken up in the span of 28 minutes.”

“The Industry Division’s performance is expected to continue improving in line with the resumption of construction activities. The division’s balance order book, which is in excess of 1 million tons, is the highest since 2016 and is expected to underpin the Group’s performance in the near term whilst we continue with business rationalisation efforts through product quality improvements, cost optimisation and process efficiency enhancements,” commented Mr Liew on the prospects of the Industry Division.

Mr Liew added: “While the performance of the Port operations will be dependent on the pace of recovery of our customers’ business activities, the long term opportunities for Kuantan Port are sizeable with the continued interest from new FDIs into the Malaysia China Kuantan Industrial Park (MCKIP). The Bosai Mineral Group Co Ltd from China, has recently announced their plans to invest RM10.6 billion to set up their operations in MCKIP, which may potentially accelerate our plans to build Phase 2 of the Kuantan Port’s New Deep Water Terminal.”

On the Group’s Toll business, Mr Liew added that there has been a general pick-up in road commute following the relaxation of movement controls under the National Recovery Plan. As a result, the Group’s toll operations are seeing traffic volumes steadily improve to near pre-Covid levels.

With the release of the 2Q FY2022 results, the Company declared a single tier interim dividend of 2.0 sen per share. In addition, the Company also declared a special dividend of 15.0 sen per share following the completion of the disposal of IJM Plantations.

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About IJM Corporation Berhad

IJM Corporation Berhad (“IJM”), formed in 1983, today ranks as one of Malaysia’s leading conglomerates with an international footprint forged by its four core businesses: construction, property development, industry (quarrying and the manufacture of building materials) and infrastructure concessions. IJM holds leading positions across all its business divisions. Its growth is the direct result of strong leadership, dedicated employees, financial prudence and commitment to good governance and quality.

The Group presently has a market capitalisation of around RM6.4 billion and as of September 2021, the Group employed around 3,800 employees and had total assets of RM22.0 billion.

For more information, visit www.ijm.com

For media enquiries, please contact:

Ms. Mandy Chen, Corporate Communications, at mandychen@ijm.com or + 60 12 607 6121

Mr. Shane Guha Thakurta, Investor Relations, at shanethakurta@ijm.com or + 60 3 7985 8041