MIDF expects 9.7% IJM revenue growth y-0-y in 2010

  • Business
  • Wednesday, 25 Nov 2009

KUALA LUMPUR: MIDF Research expects IJM Corp Bhd to post 9.7 per cent revenue growth year-on-year for the financial year 2010 on the back of strong billings on RM4.8 billion order book.

"We estimate the pre-tax profit margin in the 2010 financial year to be maintained at 11.5 per cent as cost pressure stabilises," it said in its research note on Wednesday.

High material cost like steel, which peaked at RM4,000 a tonne, has since softened to around RM2,000 a tonne in the third quarter this year, which translated into healthier margins for construction players.

"We expect IJM Corp's financial year 2010 net profit to be at RM431.3 million, an improvement of 7.3 per cent year-on-year," MIDF Research said.

It said a stronger 2010 second half financial year is expected as IJM's RM4.8 billion order book will be enhanced by more projects announced under the second stimulus package.

As at first half of 2010 financial year, tenders for Low Cost Carrier Terminal and Light Rail Transit projects have not been called but pre-qualification process has been called.

IJM has submitted the relevant documents and will bid for sizeable packages once the tenders open, MIDF Research said.

There will also be other tenders for the Pahang-Selangor Water Transfer project, including for construction of dams, intakes, ancillary infrastructure and treatment plants.

"IJM is also likely to benefit from the RM1.2 billion Mengkuang Dam expansion and the RM5 billion Gemas-Johor Baharu electrified double track project," it said.

The research firm believes IJM's share price has further uptrend potential as more projects are announced next year, adding that the catalyst for going forward will be the award of more sizeable projects. - Bernama

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