IJM releases Financial Results for the Quarter Ended 31 December 2016

PETALING JAYA, 23 FEBRUARY 2017 - IJM Corporation Berhad (“IJM”) today announced that it has accepted a letter of award from MFBBCC Retail Mall Sdn Bhd for the design and build for retail mall substructure and superstructure works with associated local infrastructure and landscaping Works (Parcel 1, Phase 1 of Bukit Bintang City Centre Development) at Jalan Hang Tuah/Jalan Pudu, Wilayah Persekutuan Kuala Lumpur for a contract sum of approximately RM1.16 billion. The construction period of the project is 40 months.

The Project includes one block of 7-storey retail mall including a 1-level lower ground and a 1-level mechanical room on top of a 6-level car park comprising 2-level lower ground and a 4-level basement.

IJM today also released its financial results for the third quarter ended 31 December 2016. Group consolidated revenue stood at RM1,596.5 million, representing an increase of 10.9% from RM1,439.9 million reported in the same quarter a year ago mainly due to improved performance from the Construction, Property, Industry and Plantation divisions. The Group’s profit before tax decreased by 46.1% to RM200.9 million as compared to the same quarter last year due to the non-recurrence of a one-off gain from the disposal of a 70% equity interest in Swarna Tollway Private Limited totalling RM133.3 million recognised last year as well as lower contribution from the Plantation division and the Group’s port operations. 

Construction division revenue this quarter increased to RM619.5 million, 27.7% higher than the same quarter last year, as the physical progress of certain major projects that were secured in the previous year accelerated and contributed significantly to the Division’s topline. The Property division reported marginally higher revenue, by 1.7%, to RM311.1 million as compared to the same quarter in the previous year while revenue of the Industry division increased by 26.6% to RM293.3 million mainly due to higher off-takes from local and overseas projects which increased the delivered tonnage of piles and quarry products. As a result of higher crude palm oil commodity prices, the Plantation division saw revenue increase by 41.5% to RM220.3 million as compared to the same quarter last year. The Infrastructure division, however, recorded a 41.7% decrease in revenue to RM152.3 million compared to the same quarter last year due mainly to lower cargo throughput handled by the Group’s port concession.

Quarterly PBT of the Construction division increased 40.2% to RM48.8 million as compared to the previous year’s corresponding quarter in tandem with the increase in revenue. Profitability of the Property division continued to be weighed down by lower gross profit margin as a result of its product mix consisting of more affordable properties and increased incentives being offered to buyers. Nonetheless, its pre-tax profit was 104.1% higher as compared to the preceding year’s corresponding quarter mainly due to the recognition of unrealised foreign exchange gain of RM10.4 million in the current quarter as opposed to a loss of RM10.7 million in the preceding year’s corresponding quarter. Following increases in revenue, the Industry division saw its pre-tax profits increase 12.2% to RM39.7 million. Despite the increase in CPO price, pre-tax profit of the Plantation division decreased to RM28.9 million due mainly to a strengthening of the US Dollar against the Indonesian Rupiah which resulted in unrealised net foreign exchange loss of RM16.9 million in the quarter as opposed to unrealised net foreign exchange gain of RM35.3 million in the same quarter last year.

The Infrastructure division, in the quarter, reported a pre-tax loss of RM9.7 million due to the above mentioned non-recurrence of the gain on disposal of the Group’s 70% equity interest in Swarna Tollway totalling RM133.3 million recognised in the previous year as well as foreign exchange loss of RM47.9 million arising from unfavourable foreign exchange movements in the quarter as compared to a foreign exchange gain of RM29.5 million in the same quarter last year. The foreign exchange loss this quarter, however, was cushioned by a foreign exchange gain of RM45.0 million recorded in “Investment and Others”.

Underscoring his confidence in the Group’s outlook, IJM’s Managing Director & CEO Dato’ Soam Heng Choon said: “The Group’s prospects under the Construction and Industry divisions are supported by strong current outstanding order book levels and will continue to benefit from the ongoing infrastructure spending identified by the 11th Malaysia Plan. The Group is well-positioned to expand the capacity of its concessions assets while its existing portfolio provides stable and predictable cash flow streams. The Group also has a fast maturing Plantation land bank profile to provide FFB production growth in the next few years. Despite the challenging property market outlook, the Group’s Property division expects to sustain its performance on the back of unbilled sales in excess of RM1.7 billion.”

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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 located in 10 countries, with primary focus in Malaysia, India and Indonesia. The Group presently has a market capitalisation of around RM12 billion and as of December 2016, the Group employed around 4,600 employees and had total assets of RM20.5 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.