KUALA LUMPUR (Aug 28): IJM Corp Bhd saw a 5.3% decline in net profit to RM59.42 million for the first financial quarter ended June 30, 2019 (1QFY20) from RM62.76 million a year ago, mainly due to income tax expense and lower contribution from the investment and others division.
This resulted in a lower earnings per share of 1.64 sen for 1QFY20 compared with 1.73 sen for 1QFY19.
Operating revenue for the quarter under review, however, was up 6.9% to RM1.54 billion from RM1.44 billion a year ago, on higher revenues contributed by the property development and infrastructure divisions.
On prospects for the current financial year ending March 31, 2020 (FY20), IJM expects the year to be challenging given the constantly changing business environment.
Its construction division expects a challenging year in view of the subdued property market and reduced public spending by the government.
"With reduced availability of new construction jobs in the local market and a more competitive tender environment, the division will remain vigilant and cautious to preserve its earnings whilst focusing on the execution and timely completion of its existing projects," IJM said.
Nevertheless, based on an outstanding order book of RM6.1 billion, underpinned by the implementation of on-going projects, the division expects a satisfactory performance for FY20.
With a potential conversion of unbilled sales of about RM2 billion, IJM said the property development division is expected to maintain a satisfactory performance in FY20.
The group’s industry division also expects a challenging year given the competitive domestic and overseas operating environment.
"The plantation division expects a challenging year due to the prevailing low commodity prices and the volatility of the foreign exchange rates particularly that of the rupiah against the US dollar and yen.
"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 face cost pressures arising mainly from wage increases," it added.
Shares in IJM slid 11 sen or 4.78% to settle at RM2.19, bringing a market capitalisation of RM7.95 billion.