This article first appeared in The Edge Financial Daily on November 27, 2018

KUALA LUMPUR: IJM Plantations Bhd slipped into the red again. The group posted a net loss of RM28.3 million for the second financial quarter ended Sept 30, 2018 (2QFY19) compared to a net profit of RM7.44 million a year ago.

This is the second consecutive quarter of losses.

Quarterly revenue shrunk nearly 29% to RM140.09 million from RM196.44 million a year ago amid lower sales volume and commodity prices.

The group fell victim to the weaker Indonesia rupiah against the greenback which resulted in net unrealised foreign exchange (forex) losses on the US dollar-denominated borrowings, which amounted to RM11.83 million compared with RM640,000 in the previous corresponding quarter.

On top of that, there was net forex losses of RM10.83 million booked in as finance costs in 2QFY19, according to the group’s filing with Bursa Malaysia yesterday.

In addition to the lower fresh fruit bunches (FFB) production at home, the lower sales were also due to palm oil delivery constraints in Indonesia owing to an adverse market supply and demand conditions.

Loss per share for 2QFY19 is 3.21 sen against earnings per share at 0.85 sen in the previous corresponding period.

For the six months ended Sept 30, 2018 (1HFY19), IJM Plantations posted a net loss of RM47.87 million against net profit of RM18.89 million previously.

Cumulative revenue fell 15.2% to RM323.23 million from RM381.03 a year earlier due to the lower commodity prices. The group’s FFB production was lower primarily due to the change in cropping pattern in home operations.

IJM Plantations’ losses reflected on its parent IJM Corp Bhd’s quarterly earnings. IJM Corp’s net profit plunged 80.8% to RM21.92 million in 2QFY19 from RM114.23 million a year ago due to lower revenue in nearly all its divisions.

A big leap on net unrealised forex loss to RM33.5 million from RM400,000 a year earlier dragged the group’s earnings per share to 0.6 sen in 2QFY19 from 3.15 sen a year earlier, according to IJM Corp’s stock exchange filing yesterday.

Quarterly revenue was down 18% to RM1.31 billion from RM1.6 billion a year earlier.

Still, IJM Corp declared a single tier first interim dividend of two sen per share, payable on Dec 27, 2018, although this is lower compared to a three sen dividend a year ago.

For 1HFY19, IJM Corp’s net profit declined 64% to RM84.68 million from RM235.4 million previously. Cumulative revenue was down 10% to RM2.75 billion from RM3.06 billion in the year before.

Going forward, IJM Corp expects continued growth in its construction division based on an outstanding order book of RM8.8 billion.

The group’s property division has unbilled sales of about RM2 billion and is expected to deliver a satisfactory performance in FY19, it said.