PETALING JAYA: With all its businesses fully operational, IJM Corp Bhd expects an improvement in its financial performance for 2021.
“The group’s fundamentals remain solid, anchored by our resilient portfolio of businesses and a strong balance sheet to weather short-term uncertainties, ” IJM CEO and managing director Liew Hau Seng said in a statement after the group’s virtual annual general meeting.
“We are optimistic that our performance in the upcoming quarters of the financial year ending March 31,2021 (FY21) will be better, ” he said yesterday.
At the moment, the diversified conglomerate owns infrastructure assets such as Kuantan Port and highway concession assets, namely, the New Pantai Expressway, the Besraya Expressway, Lebuhraya Kajang-Seremban and the West Coast Expressway.
IJM is sitting on a construction order book of RM5.5bil comprising building, infrastructure and road projects from both the private and public sectors.
“It will provide earnings visibility over the next two to three years. Recent job wins such as the retail mall and the Penang Waterfront Convention Centre (RM865mil) in The Light City, Penang, as well as TRX Residences (RM530mil) at Tun Razak Exchange (TRX) are high-quality projects that allow IJM to demonstrate its delivery capabilities, ” it said.
Liew said the group had demonstrated its resilience against the challenging backdrop in 2020 that saw many businesses being frozen due to the Covid-19 lockdown.
On the local front, IJM pointed out that the group had experienced weaker external demand, changes in the political landscape, a general decline in corporate profitability and continued weakness in the property market.
“Public-sector investments were particularly weak mainly due to lower capital spending and the review of large infrastructure projects, ” the group said.
IJM said it will be looking to monetise its “low-yielding” assets and would be exploring for more infrastructure assets.
Hong Leong Investment Bank (HLIB) Research said that while it expects IJM’s earnings to recover in the coming quarters, it has cut its earnings forecast on the company after revising property sales and contract renewal estimates assumption.
It said that IJM is targeting property sales of RM800mil to RM1bil in FY21 and had so far achieved RM320mil in the first quarter ended June 30. “Nevertheless, we do anticipate a potential drop off in sales momentum upon expiry of the blanket loan moratorium at end Sept 2020, ” HLIB said. It has cut IJM’s FY21 and FY22 earnings by 5.8% and 5.5%, respectively.
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