PETALING JAYA: IJM Corp Bhd saw its net profit for the second quarter ended Sept 30, plunge 80.8% to RM21.92 million from RM114.23 million due to weaker earnings posted by the group’s construction, property development, manufacturing & quarrying, plantations and infrastructure divisions.
Revenue declined 10.03% to RM2.75 billion from RM3.06 billion due to lower revenue contributed from the aforesaid divisions.
Commenting on prospects, the group’s board of directors said that its construction division expects continued growth based on an outstanding order book of RM8.8 billion, underpinned by the implementation of ongoing domestic projects.
“The local property market is expected to remain challenging, with the key issues of price affordability, the overhang of high priced properties, rising costs of living and tight financing continue to have a dampening effect. Nonetheless, the Property Development division remains 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 current financial year,” it added.
Given a difficult operating environment both domestically and overseas, the group’s Industry division expects a lower performance for the current financial year.
As for its plantation division, a challenging year is expected due to the weakening of the commodity prices, volatile foreign exchange rates particularly that of the Indonesian Rupiah against the US dollar and higher borrowing costs.
“Notwithstanding the anticipated recovery of crop production from the effects of the prolonged dry weather and increased young mature areas, the division continues to be affected by the start-up yields whilst incurring full plantation maintenance costs and overheads,” it added.
Its toll and port operations continue to provide recurrent revenue streams as existing concessions mature thereby further enhancing the earnings of the group’s Infrastructure division.
“Based on the above-stated factors and given the constantly changing business environment, the group expects the current financial year to be challenging.”
For the cumulative period of six months, the group ’s net profit slumped 64.02% to RM84.68 million from RM235.40 million.
Revenue fell to RM2.75 billion from RM3.06 billion a year ago.
