This article first appeared in The Edge Financial Daily on November 27, 2019

KUALA LUMPUR: IJM Corp Bhd’s net profit more than tripled to RM70.1 million for the second financial quarter ended Sept 30, 2019 (2QFY20) from RM21.92 million a year ago, on improved earnings from the property development, manufacturing and quarrying, plantation and infrastructure divisions.

Its quarterly revenue rose 20.2% to RM1.57 billion from RM1.31 billion a year ago.

The group declared a first interim dividend of two sen per share for the financial year ending March 31, 2020 (FY20), payable on Dec 27.

The strong quarterly performance lifted the group’s net profit for the cumulative six months (1HFY20) by 53% to RM129.53 million from RM84.68 million a year ago. Its revenue increased 13.2% to RM3.12 billion from RM2.75 billion for 1HFY19.

IJM Corp warned that the construction division continues to be impacted by a subdued property market and the government’s reduced infrastructure spending.

“With reduced availability of new construction jobs locally and a more competitive tender environment, the division will remain vigilant and cautious to preserve its earnings, while focusing on the execution and timely completion of its existing outstanding order book of RM5.1 billion,” it said in a filing with Bursa Malaysia yesterday.

Also, although consumer sentiments have improved, key issues of price affordability, overhang of high-rise properties, rising cost of living and tight financing arrangements will still have a dampening effect on the local property market, said IJM Corp.

Nevertheless, IJM Corp managing director and chief executive officer Liew Hau Seng viewed  the group’s property division is expected to sustain its performance on unbilled sales of RM1.9 billion.

For its industry division, the group expects a challenging year, given a competitive domestic and overseas environment in which it operates.

The plantation division continues to face cost pressures arising mainly from wage increases, and the impact of volatile foreign exchange rates particularly the rupiah against the US dollar and yen, said IJM Corp.

It added that current commodity price levels and an anticipated better crop production from the Malaysian and Indonesian operations for 2HFY20 are expected to contribute to an improved performance.

“The group’s toll and port operations still provide recurrent revenue streams as existing concessions mature, thereby further enhancing the infrastructure division’s earnings.”