IJM releases Financial Results for Quarter Ended 31 December 2018

Key highlights

• Current outstanding order book stands at a near record high of RM8.4 billion, consisting of high-quality prominent projects. IJM is well-positioned to meet the new construction landscape as the country is still in need of quality contractors with a proven execution track record and strong balance sheet to execute infrastructure projects vital to its economic growth agenda
• Seeing a stable demand for property projects that are well-planned. Unbilled property sales of RM2.2 billion provides healthy earnings visibility
• Increasing recurring income streams from the New Deep Water Terminal Phase 1A at Kuantan Port which commenced operations in 3QFY19 and the imminent completion of Menara Prudential, TRX.

PETALING JAYA, 26 February 2019 - IJM Corporation Berhad (“IJM”) today released its financial results for the third quarter ended 31 December 2018. Group consolidated revenue stood at RM1,507.2 million, representing a marginal decrease of 2.7% from RM1,549.4 million reported in the same quarter a year ago following lower revenue contributed by the Group’s Construction, Industry and Plantation divisions. The Group also recorded a pre-tax profit for the current quarter of RM177.3 million, an increase of 11.4% as compared to the same quarter last year, mainly due to improved earnings from the Group’s Property and Infrastructure divisions.   

Following the Group’s Construction division considerable order book replenishment in FY2018, these newer projects have yet to reach optimal construction phase. This has resulted in the Construction division revenue this quarter decreasing to RM479.3 million, 16.8% lower than the same quarter last year. 

The Property division reported higher revenue, by 43.5%, to RM479.9 million as compared to the same quarter in the previous year due to the successful launch of a condominium project in Penang and higher sales from the disposal of completed units as well as certain parcels of commercial land during the quarter.

Revenue of the Industry division decreased by 16.1% to RM219.2 million mainly due to lower sales volume of piles and quarry products delivered. 

Revenue of the Group’s Plantation division saw a decline of 36.5% against the previous year’s corresponding quarter to RM142.9 million mainly due to lower CPO sales volume and commodity prices.

The Infrastructure division, however, recorded a 22.3% increase in revenue to RM185.7 million as compared to the same quarter last year due mainly to an expansion of cargo throughput handled by the Group’s port concession which grew 56% in the corresponding period. The Group’s wholly-owned toll concessions in Malaysia also contributed revenue growth of 14% in the quarter compared to the same quarter last year. 

Quarterly PBT of the Construction division decreased by 34.6% to RM34.2 million as compared to the previous year’s corresponding quarter mainly due to project revenues not yet reaching optimal construction phase and lower construction margins. Following the improvement in revenue and higher margins derived from the current development projects, the pre-tax profit of the Property division for the current quarter increased by 216.4% compared to the preceding year’s corresponding quarter. The Industry division saw a 22.5% decrease in its pre-tax profits to RM15.0 million due to lower volumes in the piles and quarrying sectors.

The pre-tax loss of RM2.0 million for the current quarter recorded by the Plantation division was mainly attributable to the lower commodity prices, compounded by the production cost pressure in the Malaysian operations and also the increase in young mature areas in the Indonesian operations incurring full fixed plantation maintenance and overhead costs set against start-up crop yields. The division’s results this quarter, however, was supported by the net unrealised foreign exchange gain of RM18.0 million on the US Dollar denominated borrowings as compared to the unrealised foreign exchange losses of RM3.6 million in the corresponding quarter last year.

The higher revenue recorded by the Group’s toll and port concessions increased the Infrastructure division’s pre-tax profit for the quarter to RM63.4 million from RM42.0 million in the previous year’s corresponding quarter. 

Dato’ Soam Heng Choon, Managing Director & CEO of IJM Corporation Berhad said: “Our construction business has a good mix of private and public projects. Our outstanding order book is at a near-record high of RM8.4 billion, which provides earnings visibility over the next few years. Going forward, IJM will be well-poised to meet the new construction landscape as the country is still in need of quality and reputable contractors to execute its infrastructure needs.” 

On the Group’s property division outlook, Dato’ Soam added: “The property market has stabilised and we are on track to achieve our sales target of RM1.6 billion for FY19. This is on the back of the positive response to our well-established townships in Bandar Rimbayu and Seremban 2 as well as recent launches such as Residensi Suria Pantai in Pantai Sentral Park and Ara Impian in Seremban 2. The Group’s Property division expects to sustain its performance on the back of unbilled sales of around RM2.2 billion.” 

On Kuantan Port, Dato’ Soam elaborates: “Phase 1A of the New Deep Water Terminal has also commenced operations in the quarter and has since successfully received 22 vessels – the largest one having a capacity of around 120,000 FWT. Cargo, typically consisting of iron ore and coal, is meant for the newly commissioned Alliance Steel plant at the Malaysia China Kuantan Industrial Park.” 

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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 KLCI. Its business activities encompass construction, property development, manufacturing and quarrying, infrastructure concessions and plantations.

Headquartered in Selangor, its operations are in 10 countries, with primary focus in Malaysia, India and Indonesia. The Group presently has a market capitalisation of around RM7.1 billion and as of December 2018, the Group employed around 4,600 employees and had total assets of RM22 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.