IJM Corp buoyed by strong showing across divisions

Shipping rebound: A view of the Kuantan Port at night. IJM says the port saw a resurgance in the cargo it handled, driven by China’s reopening from Covid restrictions.

PETALING JAYA: IJM Corp Bhd expects a positive outlook ahead for its core business segments, especially in light of encouraging order-book replenishment prospects for its construction and industry divisions.

Chairman Tan Sri Krishnan Tan said the group’s improving outlook is further supported by strong property sales that were recorded for its financial year ended March 31, 2023 (FY23), improving cargo throughput at its port operations, and complete recovery of tollway traffic to pre-pandemic levels.

“Having secured RM1.5bil worth of new construction contracts in FY23, the construction division’s outlook is supported by an outstanding order book of RM4.5bil, providing the group with stable earnings visibility over the next few years.

“A strong balance sheet and track record also puts the group in good stead to pursue the robust flow of foreign direct investments in the manufacturing sector, large data centres and logistics warehouses, as well as upcoming mega public infrastructure investments such as the Mass Rapid Transit 3 and flood mitigation projects,” he said in the company’s annual report.

Separately, Tan said the group’s property division achieved its highest-ever sales of RM2.7bil in FY23, surpassing the previous record of RM2.5bil set in FY22.

“The division has also further reduced completed property inventory to RM738.15mil at end-March 2023 from RM865.42mil a year ago, putting it in a strong position to continue serving its core mid-range market segment.

“Going forward, the group will continue to monetise specific land bank assets while strategically acquiring new ones to support our growth.”

Benefiting from the resumption of construction activities both domestically and regionally, Tan said the group’s industry division, which is the largest manufacturer of high performance pretensioned spun high strength concrete piles in South-East Asia, achieved its highest profit performance in over a decade.

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

Tan said the group’s Kuantan Port recorded 22.7 million tonnes of cargo throughput in FY23, compared with FY22.

“Notably, 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.

“During the year, pick-up in foreign direct investments activities at the Malaysia-China Kuantan Industrial Park (MCKIP) signalled promising long-term growth for Kuantan Port.”

Tan noted that Alliance Steel, the largest investor in MCKIP, is pursuing significant expansion of its current production capacity of 3.5 million tonnes a year, facilitated by the acquisition of more land in MCKIP 1.

“The government’s commitment to infrastructure development in the area, predominantly through the East Coast Rail Line project, further positions Kuantan Port as a vital catalyst for the economic development of the East Coast region.”

Additionally, Tan said the group’s toll operations had seen a complete recovery in traffic volumes to pre-Covid levels after the reopening of economic activities.

“The group also expects the financial performance of its toll operations to markedly improve in the coming year following the non-recurrence of sizeable one-off items that affected its performance in FY23.

“These included expected credit losses recognised for a financial instrument related to the West Coast Expressway, as well as higher unrealised foreign exchange losses on its dollar-denominated borrowings for its Indian operations and higher resurfacing cost incurred at the Vijayawada Tollway,” he added.

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IJM Corp , Krishnan Tan , order book


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