Key highlights:

• Strong rebound in 2Q FY2021 revenue and earnings as the Group’s businesses resumed operations post lifting of movement control restrictions
• Core PBT of all Divisions back in the black in 2Q FY2021, including Plantation Division (after adding back foreign exchange translation losses incurred in the quarter)
• RM2.0 billion in construction order book wins amassed in 2020, including the recently awarded RM314.8 million Hotel and Office Tower in The Light City, Penang
• Property sales of RM400 million in 2Q FY2021 underscores demand in the mid-segment market
• Kuantan Port reports highest quarterly throughput since bauxite cargo surge in 2015  
• Strong cash reserves and a healthy net gearing ratio of 0.49 times provide resilience to tide through short-term uncertainties

Petaling Jaya, 25 November 2020 – IJM Corporation Berhad (IJM) today released its financial results for the second quarter ended 30 September 2020 (2Q FY2021). Group revenue for 2Q FY2021 declined 9.2% to RM1,428.7 million from RM1,574.2 million reported in the corresponding quarter last year. The Group’s profit before tax (PBT) increased by 41.6% to RM161.7 million in the quarter (2Q FY2020: RM114.2 million). 

CEO & Managing Director of IJM, Mr Liew Hau Seng explained: “The Group’s businesses were able to smoothly resume operations following Malaysia’s relaxation of its lockdown criteria as it entered into the Recovery Movement Control Order phase on 10 June. The decrease in Group revenue in the quarter compared to 2Q FY2020 was mainly due to initial familiarisations with the new standard operating procedures and safety protocols, although business operations quickly gathered pace after that.”

As site activities recommenced in the quarter and only after Covid-19 tests were conducted on all foreign construction workers, revenue of the Construction Division declined slightly by 3.5% this quarter to RM573.6 million compared to the corresponding quarter last year. PBT, however, increased 32.2% to RM50.9 million mainly due to improvement in net margin and increased net foreign exchange gains.

The Group’s Property Division reported revenue of RM255.1 million in 2Q FY2021, 32.2% lower than RM376.0 million registered in the corresponding quarter last year mainly due to lower work progress for its development projects. The Division reported a PBT of RM33.0 million in the quarter, a decrease of 11.4% compared to RM37.2 million a year ago.

The Industry Division saw a decline in revenue by 28.7% to RM162.4 million in 2Q FY2021 from lower deliveries of piles, quarry products and ready-mixed concrete. Following this, the Division recorded a PBT of RM6.1 million in the quarter, 65.8% lower compared to RM17.9 million in 2Q FY2020.

The Infrastructure Division’s revenue for the current quarter increased by 11.2% to RM225.9 million mainly due to a 20.1% increase in cargo throughput handled by the Group’s Kuantan Port operations. The Division reported a PBT of RM68.4 million for the quarter, a 94.1% increase compared to RM35.2 million in 2Q FY2020. In tandem with the general pick-up in road commute, the Group’s Toll operations saw traffic volumes steadily improve to near pre-Covid-19 levels in the quarter.

The Plantation Division reported a 22.3% increase in revenue for the current quarter to RM211.4 million mainly due to higher commodity prices. If not for net foreign exchange losses of RM35.0 million (2Q FY2020: gain of RM0.02 million) on its foreign currency denominated borrowings, the Division would have reported a core PBT of RM32.6 million instead of a loss before tax of  RM2.4 mil for the current quarter.

The Group expects a gradual recovery in the business landscape, arising from the efforts of the Malaysian Government to revitalise the economy through an expansionary Budget for 2021. Nonetheless, to address the short-term economic uncertainties, the Group has implemented appropriate mitigation measures, focusing on cost containment, prudent capital management and cash preservation. The Group’s fundamentals remain solid and its healthy balance sheet (net gearing of 0.49 times and gross cash balance of RM2.4 billion) is expected to provide resilience through these difficult months.

“As at end-September 2020, we have a healthy outstanding construction order book of RM5.4 billion that comprises a good mix of private and public sector projects, providing the Group with good earnings visibility over the next few years. Job wins in the year such as The Light City’s The Waterfront Shoppes, the Penang Waterfront Convention Centre and the just secured Hotel and Office Tower component of the development, as well as TRX Residences in the KL city centre, are high quality projects that allow us to demonstrate our construction capabilities as well as our ability to introduce vibrant integrated property offerings into the market,” said Mr Liew.

On the Group’s Property Division, Mr Liew said: “IJM Land’s forte is in designing and offering the right product with the appropriate pricing at highly sought-after locations. In the quarter, we registered sales of RM400 million on the back of encouraging take-up of mid-range properties priced between RM400,000 and RM900,000.”

IJM Land’s new launches in the quarter were Bandar Rimbayu’s Phase 12B “Starling”, consisting of 148 units with a GDV of RM100 million and Rimbun Jasmine at Seremban 2 with 129 units amounting to a GDV of RM65 million.

“IJM Land has been adapting its strategies to respond to the challenging financing landscape arising from the Covid-19 situation. Launched in August, IJM Land’s 'Now You Can' homeownership campaign introduces low-interest rates, a savings plan, and high rewards to prospective homebuyers. Financial coverage is also provided in the event of a loss of employment or a pay cut, providing assurance to aspiring homebuyers. Moving forward, IJM Land’s strategies would also be highly flexible with customised plans and solutions to suit individual needs and requirements.”

On the back of strong cargo throughput volume seen at Kuantan Port in the period-to-date, Mr Liew added: “The opportunities for Kuantan Port are sizeable and the expansion of Phase 1 of the New Deep Water Terminal has been very timely to capture the incoming growth from the Malaysia China Kuantan Industrial Park (MCKIP). As we continue to see interest from new FDIs into MCKIP, coupled with the Government’s commitment to supporting infrastructure development in the area, predominantly through the ECRL project, we are confident that Kuantan Port will play a pivotal role in the economic development in the East Coast region.”

Following the results, the Company declared a single tier interim dividend of 2.0 sen per share.

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About IJM Corporation Berhad

IJM Corporation Berhad (“IJM”), formed in 1983, is today one of Malaysia’s leading construction groups and is listed on Bursa Malaysia. Its business activities encompass construction, property development, manufacturing and quarrying, infrastructure concessions and plantations.

Headquartered in Selangor, its operations are located in 8 countries, with primary focus in Malaysia, India and Indonesia. The Group presently has a market capitalisation of around RM5.8 billion and as of September 2020, the Group employed around 4,100 employees and had total assets of RM23.7 billion.

The Group’s belief in a shared destiny with its employees remains pivotal to its growing success while its reputation for professionalism, performance and good governance is acknowledged by customers and investors alike from its numerous corporate and industry accolades. IJM is committed to ethical business conduct and subscribes to the principles of good corporate citizenship for sustainable growth and development.

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