IJM reports 3-fold profit jump to RM94mil in 2Q

PETALING JAYA: IJM Corp Bhd believes it is well placed to grow its existing businesses, develop a portfolio in adjacent businesses and expand its geographical footprint.

With a net gearing of 0.27 times, IJM Corp chief executive officer and managing director Lee Chun Fai said the group will be able to undertake large scale projects and strategic investments.

For the second quarter ended Sept 30, 2023, IJM Corp’s net profit rose to RM93.69mil from RM27mil in the previous corresponding period, while revenue improved to RM1.46bil from RM1.07bil a year earlier.

Basic earnings per share stood at 2.67 sen versus 0.77 sen previously.

IJM Corp said its construction division reported a notable increase in revenue of 54.9% to RM416.2mil during the quarter, mainly driven by higher construction work activities during the period.

“However, the division’s pre-tax profit declined by 37.3% to RM15.3mil compared to the corresponding quarter last year, as profit margins on some ongoing projects were negatively impacted by increases in material and commodity prices, along with prolongation cost.

“Additionally, profit recognition on new projects undertaken is pending until a certain physical completion milestone is achieved.”

Additionally, the group said its property division reported revenue of RM463.7mil during the quarter under review, which was a 42% increase from RM326.6mil registered in the corresponding quarter last year.

The company said this was mainly due to higher work progress in ongoing projects and the completion of the sale of two parcels of industrial land in Bandar Rimbayu.

Meanwhile, the group’s industry division saw an increase in revenue of 21.9% to RM316mil in the second quarter, due to higher deliveries of piles, quarry products and ready-mixed concrete.

For the six-months period ended Sept 30, 2023, IJM Corp’s net profit grew to RM194.33mil from RM60.44mil in the previous year, while revenue improved to RM2.68bil from RM2.14bil previously.

Going forward, the group said its construction order book replenishment prospects are encouraging and is supported by its outstanding order book of RM6.4bil.

It said this included three recently secured construction contracts worth RM1.7bil in the second quarter, namely Package 2A and Package 2B of the Immigration Customs and Quarantine Complex for the Johor Baru-Singapore Rapid Transit System Link project; the ECRL Kuantan Port spur line and an ancillary building at an industrial property project in Kulim, Kedah.

“The property division maintains its commitment to offering compelling products, carefully tailored to align with market preferences across diverse price points.

“With unbilled sales of about RM2.5bil and its on-going efforts in introducing attractive packages with right product pricing, the property division is expected to deliver a strong performance in the near term.”

IJM Corp also declared a single tier interim dividend of 2 sen per share.