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Two divisions pull IJM Q1 profit

Wednesday August 26, 2009

IJM Corp Bhd’s net profit in the first quarter ended June 30 dropped 22.5% to RM70.8mil from RM91.3mil in the previous corresponding period mainly due to lower contribution from the construction and plantation divisions.

Its revenue fell 4.9% to RM1.16bil from RM1.22bil previously.

In a filing with Bursa Malaysia, the company said the lower contribution from the plantation division was due to the fall in crude palm oil prices in that period.

It said the construction division suffered lower margins from contracts that were affected by higher input costs as well as financing costs incurred in India.

Its subsidiary IJM Land Bhd posted a net profit of RM26.7mil in the first quarter, 229.6% higher than RM8.1mil in the same period last year. Its revenue rose 178.4% to RM284.8mil.

Meanwhile, IJM Plantations Bhd’s net profit dropped 82% to RM7.9mil in the quarter under review, compared with RM43.8mil previously. Its revenue was down 40.5% to RM94.3mil compared with RM158.5mil.

Chief executive officer and managing director Datuk Krishnan Tan said its order book for the construction division was still strong at over RM4bil, half of which from local projects.

“The stimulus packages in most Asian countries as well as locally provide us with more opportunities and we hope to gain from them,” he told a press conference after the company AGM yesterday.

He said the company was currently bidding for both overseas and local projects but refused to disclose their sizes.

“Our overseas targets are India and the Middle East, particularly the Gulf region.”

He said the company aimed to maintain about RM4.5bil worth of order book at any one time.

Asked whether the company was currently bidding for the new main low-cost carrier terminal (LCCT) project, Krishnan said the pre-qualification process was currently in progress and the company had submitted the relevant documents for this purpose.

He said the company had the expertise to bid for the building and runway works at the LCCT, and would probably bid for the sizeable packages.

Krishnan said the property division was doing well in the first quarter and IJM Corp was optimistic on its performance going forward due to lower interest rates and its mixed products range in the commercial, residential, industrial and retail segments.

“With strong property sales yet to be billed, the group’s property division is expected to achieve a satisfactory performance in the current financial year,” IJM Corp said in a statement yesterday.

This article is a verbatim copy of the original article from The Star.

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