IJM Corp cuts dividend on lower profit, sees challenging year ahead 

  • Construction
  • Friday, 26 Jun 2020

KUALA LUMPUR: IJM Corp Bhd expects its performance this financial year to be impacted by the subdued property market and lower availability of new construction jobs after it posted a steep decline in March quarterly profit.

Net profit in the fourth quarter ended March 31 tumbled 70% to RM71.3mil, or 1.96 sen a share.

Full year net profit was RM250.6mil or 6.91 sen a share.

IJM Corp has declared a second interim dividend payout of 1 sen a share, down 50% from a year ago.

"The group anticipates disruptive implications of the pandemic on the overall market environment, together with the uncertainty of commodity prices and volatility of foreign exchange rates," it said.

Given the challenging market outlook, IJM said its construction would focus delivering its existing outstanding order book of RM4.5bil.

"The reduction in the availability of new construction jobs in the local market is also expected to impact the Group’s Industry division," it said.

Meanwhile, the group’s property division is expected to record lower sales and lower performance in the forthcoming financial year.

"Market sentiment for the Property industry is expected to be weak in the near to medium term as purchasers would adopt a wait-and-see attitude due to the poor economic outlook and uncertainties over employment," it said.

The Group’s tolling operations are expected to be impacted by the pandemic lock-downs imposed in Malaysia and India in mid-March 2020 with the expected gradual recovery of traffic flows back to the pre-Covid 19 levels anticipated to be only after the first quarter of FY2021.

"However, the Group’s port operations are expected to provide recurrent revenue streams and earnings as the existing port concession matures," it said.

On its plantation business, IJM Corp said the division is facing cost pressures arising mainly from wage increases, the cost impact of the COVID-19 pandemic, as well as the uncertainty of the commodity prices and volatility of the foreign exchange rates.

IJM Plantations Bhd posted a net loss of RM76.4mil on revenue of RM195mil in the fourth quarter ended March 31.

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