THE Antah group's award of a highway construction contract to IJM Corp Bhd raises the latter's order book to over RM2bil. This is reassuring to investors who have been concerned over IJM's depleting order book.
IJM announced last Friday that it had secured a RM693mil contract to build a toll highway between Kajang and Seremban for Kaseh Lebuhraya Sdn Bhd, a member of the Antah group.
Antah is still in the midst of sorting out its finances after it defaulted on several bank debts. For the Kaseh highway, however, financing will be sought by Kaseh Lebuhraya, not Antah.
“Kaseh should be able to get the project financing. The proposed highway is a good alignment,” IJM managing director Datuk Krishnan Tan told StarBiz.
This job will add to IJM's contracts-in-hand. This is needed because the group has a “chewing rate” of about RM100mil a month. Hence, its order book has to be replenished. Its construction division registered a turnover of RM1.3bil last year.
The group's order book stood at RM1.2bil at the end of last year. It has not stood still. New jobs totalling RM200mil were secured in the first three months this year.
In addition, IJM has in-house construction jobs from its property development activities in Malaysia and India. These in-house jobs are not included in its order book.
Some analysts had projected the group to post flat earnings this year. Krishnan Tan, however, said that the group had a track record of achieving growth.
He pointed to the group's four operating divisions, all of which posted earnings growth last year.
In plantations, for instance, the average price obtained for crude palm oil was RM1,522 a tonne last year.
In the first quarter this year, prices were around RM2,000. “The matured acreage is also increasing,” he said.
In property development, the group has several fairly sizeable projects. It has the rights, for instance, to reclaim 200 acres on land-starved Penang island.
Elsewhere, it has development projects in Cheras (Kuala Lumpur), Klang, and a joint venture with Landmarks Bhd.
It also has 300 acres around a golf course in Sandakan, Sabah. “The town is booming because it has 1.5 million acres of oil palm plantations around it,” he said.
The group has also started on a housing project in India. There, in a joint venture with the government, it is building 2,000 low-medium and higher end houses on 33 acres. This project has a gross development sales value of RM250mil.
It may also land another housing project in India. This would cover a larger area of 500 acres in the Punjab, where a memorandum of understanding (MoU) with the authorities has been signed. IJM is working towards converting the MoU into a contract.
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