IJM Corp expects better outlook for all its divisions

PETALING JAYA: IJM Corp Bhd expects improved outlook across all its divisions which it says will help drive its core earnings growth in financial year 2024 (FY24).

The group reported a 2,173% year-on-year (y-o-y) jump in its earnings for the fourth quarter ended March 31, 2023 to RM23.05mil after excluding the plantation division comparison which had been disposed of on Sept 6, 2021.

The quarter’s revenue rose slightly to RM1.33bil from RM1.23bil a year ago.

IJM declared an interim dividend of six sen per share and a special dividend of two sen per share in conjunction with its results announcement.

It said the construction and industry divisions are witnessing encouraging order book replenishment prospects while it is also supported by strong property sales in the financial year 2023 (FY23).

IJM noted the improving cargo throughout at its port operations and a complete recovery of tollway traffic to pre-pandemic levels.

“With the pandemic and labour supply constraints largely behind us, we are optimistic of more construction job prospects entering the market, including the sizeable mass rapid transit 3 (MRT3) project, and opportunities in the industrial property sector.

“Leveraging IJM’s track record and robust balance sheet, we are in a prime position to expand our outstanding order book, which currently stands at RM4.5bil,” Lee Chun Fai, chief executive officer and managing director of IJM said in a statement yesterday.

The group’s property division achieved RM2.7bil sales in FY23, surpassing its previous record of RM2.5bil in FY22.

IJM also highlighted its progress in paring down its completed property inventory to RM719mil from RM865mil in the preceding year.

Its industry division achieved its highest profit performance in over a decade as it had benefited from the resumption of construction activities both domestically and regionally.

“Supported by a strong balance order book of one million tonnes, the division is well positioned to sustain its strong performance in the near-term,” it said.

In FY23, the group said its Kuantan Port operations recorded 22.7 million tonnes of cargo throughput which is comparable to FY22.

However, it noted that there was a resurgence in cargo handled during the final quarter of the financial year, largely driven by the reopening of economic activities in China.

IJM said its strong balance sheet, which is at a multi-year low net gearing of 25.8%, would bolster its ability to undertake large scale projects and strategic investments.

Commenting on some of its business division for the reported quarter, IJM said its construction division reported lower revenue of RM266.3mil and a pre-tax profit of RM38.8mil compared with the previous year.

This was due to the completion of major projects in the previous financial year, while newly secured projects are still in their initial stages of construction progress, it said.

Its property division reported an improved revenue of RM568.8mil and pre-tax profit of RM224.9mil in the quarter on higher profit margins derived from its current portfolio of ongoing development projects, gains from the sale of industrial land at Bandar Rimbayu as well as from the comprehensive reviews and cost-finalisation of its completed projects.

Revenues of its infrastructure division increased by 4.4% y-o-y to RM238.5mil during the quarter, driven mainly by higher toll revenue recorded locally and overseas.

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