IJM releases Financial Results for Quarter Ended 30 June 2019

Key highlights

• Revenue decreased marginally by 1.2% to RM1.44 billion 
• If not for (i) net unrealised foreign exchange losses of RM71.0 million, and (ii) RM11.8 million unrealised foreign exchange losses incurred by the Plantation division classified under Finance Cost, Core PBT for FY19 would have been RM186.1 million.
• Well-positioned to meet the new construction landscape as the country is still in need of quality contractors with a strong execution track record to execute its infrastructure ambitions to cater to its economic growth
• Unbilled property sales of RM2.0 billion

PETALING JAYA, 28 August 2018 - IJM Corporation Berhad (“IJM”) today released its financial results for the first quarter ended 30 June 2019. Group consolidated revenue stood at RM1,444.3 million, representing a decrease of 1.2% from RM1,461.6 million reported in the same quarter a year ago following lower revenues contributed by the Group’s Construction, Industry, Plantations and Infrastructure divisions. The Group’s profit before tax decreased by 44.6% to RM103.2 million compared to the same quarter last year mainly due to net unrealised foreign exchange losses of RM71.0 million this quarter as compared to a loss of RM3.6 million in the same quarter last year.

Revenue of the Construction division this quarter decreased marginally by 1.0% compared to the same quarter last year to RM526.9 million. The Property division reported higher revenue, by 14.3%, to RM334.7 million as compared to the same quarter in the previous year following higher work progress and completion of some projects in the current quarter. The Industry division reported a decrease in revenue by 15.8% to RM231.7 million mainly due to lower sales volume.

Revenue of the Plantation division decreased by 0.8% against the previous year’s corresponding quarter to RM183.1 million mainly due to lower CPO prices despite an increase in sales volume.

The Infrastructure division recorded a decrease in revenue of 5.1% to RM167.8 million, mainly attributable to a decrease in cargo throughput handled by the Group’s port concession in the current quarter compared to the same quarter in the previous year.

Quarterly PBT of the Construction division decreased by 29.2% to RM39.7 million as compared to the previous year’s corresponding quarter mainly due to the increase in unrealised foreign exchange losses.

Pre-tax profit of the Property division was RM44.9 million, 86.9% higher compared to the same quarter last year mainly due to higher profit margins derived from current ongoing projects. Following the decrease in revenue, the Industry division saw its pre-tax profits decrease by 41.3% to RM13.1 million mainly due to the lower sales volume and margins in the piles and quarrying sectors.

The Plantation division reported a loss before tax of RM26.3 million this quarter (as compared to a PBT of RM16.3 million in the same quarter last year) mainly due to net unrealised foreign exchange losses of RM30.9 million compared to RM0.8 million in the same quarter in the previous year, and by a decline in closing inventory levels valued at the prevailing lower palm produce prices resulting in an impact to EBITDA of RM24.6 million. This was compounded by the lower commodity prices and production costs pressure from the increase in young mature areas in the division’s Indonesian operations incurring full fixed plantation maintenance and overhead costs set against the start-up crop yield.

The PBT of the Infrastructure division, in the quarter, decreased to RM24.9 million from RM64.6 million mainly due to mainly due to the decrease in cargo throughput handled by the Group’s port concession as well as increased net foreign exchange loss of RM22.7 million in the current quarter compared to RM0.9 million in the corresponding quarter last year.

Dato’ Soam Heng Choon, Managing Director & CEO of IJM Corporation Berhad said: “Our construction business has registered strong growth with a good mix of private and public projects. We secured RM3.8 billion worth of order book wins in the last financial year that includes quality Grade A office tower projects such as the new HSBC Malaysia headquarters, Menara Prudential, Equatorial Plaza,  UOB Tower 2 and Uptown 8 office towers in addition to the LRT3 package from Bandar Utama to Johan Setia. In India, we announced the award of the RM1.5 billion Vijayapura-Solapur Tollway concession in November 2018.”

“Our outstanding order book is at a near-record high of RM8.8 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 contractors to execute its infrastructure ambitions. Meanwhile, we will continue to tender for quality projects,” he added.

On the Group’s property division outlook, Dato’ Soam said: “The Group’s Property division expects to sustain its performance on the back of unbilled sales of around RM2.0 billion and will soon be launching attractive products such as 3 Residence in Penang, Swan in Bandar Rimbayu and Austin Duta (Phase 6) in Johor.

IJM also announced that shareholders approved all resolutions at the company’s 34th Annual General Meeting today, where CEO & Managing Director, Dato’ Soam Heng Choon gave an overview of the results achieved in FY 2018 and fielded questions from shareholders.

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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 billion and as of August 2018, the Group employs around 4,600 employees and has total assets of RM21 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.