KUALA LUMPUR: Construction group IJM Corporation Bhd
's outstanding order-book hit a record high of about RM7bil, fuelled by new projects it secured locally in its financial year ended March 31, 2015.
Major projects secured in the financial year included the West Coast Expressway valued at RM2.83bil and the new deep water terminal at Kuantan Port-Phase 1 worth RM1.19bil.
However, the limited number of jobs, shrinking profit margins and intense competition among local and foreign contractors remain a challenge for the sector, IJM chief executive officer and managing director Datuk Soam Heng Choom said.
"The division is constantly mindful of the challenging market conditions and remains vigilant in view of the softening market demand for properties and stringent housing loan policy by Bank Negara," he said.
Additionally, the goods and services tax has adversely affected the demand for commercial properties and the risks associated with foreign exchange rate fluctuation will remain a concern for the business.
The division would, however, continue to tender for new jobs locally and overseas, said Soam in the the company's annual report.
Besides construction, the group is also involved in property, manufacturing, plantation and infrastructure.
For the year ended March 31, 2015 the group reported a consolidated revenue of RM5.44bil, with property, construction and infrastructure being the major contributors for the year.
However, the consolidated revenue for the year declined by 9% from RM6bil in financial year 2014, mainly owing to the completion of certain construction projects in the previous financial year.
Correspondingly, the group's pre-tax profit slipped 28% to RM1.01bil from RM1.41bil a year ago.
Soam said the infrastructure division's turnover improved 17% to RM1.03bil compared with 2014 mainly due to higher contribution from port cargo throughput, continued traffic growth at highway operations and consolidation of the Swarna Tollway since November 2013.
Pre-tax profit, however, decreased by 78% to RM42.28mil mainly due to one-off gains in the previous financial year, higher financing and amortisation costs of RM48.9mil following the opening of the Besraya Eastern Extension and unrealised foreign exchange losses of RM94.56mil arising mainly from US dollar denominated borrowings used to finance the group's investments in India.
IJM had recently disposed of a 70% stake in Swarna Tollway Private Ltd, a toll road concessionaire in Andhra Pradesh, India, for RM407.76mil to MAIF Investments India 3 Pte Ltd. The expected gain from the disposal is about RM92.62mil.
The division's infrastructure assets comprised 10 toll road concessions with four in Malaysia, five in India and one in Argentina. It also has a port in Pahang, a power plant in India and a water treatment plant in Vietnam. - Bernama
Limited time offer:
Just RM5 per month.
