IJM Corp sees 95.3% slump in Q4 earnings

PETALING JAYA: IJM Corp Bhd’s net profit slumped 95.3% to RM11.19 million for the fourth quarter ended March 31, 2018 against RM236 million in the same quarter a year ago, dragged by lower contribution from all business segments and the absence of disposal gain.
It posted a one-off gain of RM123.1 million in relation to the sale of 32-acre land at the Light Waterfront Penang in the previous corresponding period.
IJM’s revenue also declined 16.2% to RM1.4 billion for the quarter under review from RM1.67 billion.
The group proposed an interim dividend of 3 sen per share.
In a filing with the stock exchange, it said the construction, property, manufacturing & quarrying, plantations and infrastructure divisions posted lower revenue contribution.
IJM’s full-year net profit contracted 46.5% to RM349.81 million from RM653.77 million, while revenue was marginally down by 0.6% to RM6.03 billion from RM6.07 billion.
Commenting on the outlook, IJM said the construction division is expected to continue to grow based on its outstanding order book of RM9.4 billion.
For the property market, it looks to be challenging as the key issues of price affordability, overhang of high-rise homes, rising cost of living and tight financing will continue to have a dampening effect.
“Nonetheless, the property development division will remain steadfast in its efforts to grow its business in view of the strategic locations of its properties and the brand premium that it has established.
“With unbilled sales of about RM2.0 billion, the division is expected to maintain a satisfactory performance in the coming financial year.”
The plantation division is also anticipated to be challenging due to the volatility of commodity prices, foreign exchange rates, particularly the Indonesian rupiah against the US dollar and higher borrowing costs.
“Notwithstanding the recovery of crop production in the Malaysian operations and the higher crop production from the increased young mature areas in the Indonesian operations, the division continues to be affected by the start-up yields whilst incurring full plantation maintenance costs and overheads.”
IJM shares fell 18 sen or 8.9% to close at RM1.84 today, on some 12.5 million shares traded.