MARKET DEVELOPMENT
IJM Net Profit Up 40% to RM156 Mil
IJM Net Profit Up 40% to RM156 Mil
25/11/2015 (The Star) - IJM Corp Bhd’s net profit for its second quarter ended Sept 30, rose 40% to RM156.38mil from RM111.49mil in the previous corresponding period, while revenue during the quarter increased to RM1.34bil from RM1.29bil a year earlier.
In a filing with Bursa Malaysia, the company said the improved earnings was mainly due to higher revenues contributed by the group’s construction, industry and infrastructure divisions.
For the six-months ended Sept 30, the company’s net profit increased to RM493.25mil from RM244.87mil in the previous corresponding period, while revenue however dipped to RM2.52bil from RM2.67bil a year earlier.
The company attributed the lower revenue during the six-months period to decreases in revenue from its property and plantation divisions.
On its prospects for the remainder of its current financial year, IJM Corp said its construction division is expected to perform satisfactorily on the current high level of its order book.
It said this was also underpinned by a relatively strong private sector demand in the domestic market, substantial ongoing development activities from the group’s in house property projects as well as the Malaysian government’s continued emphasis on infrastructure spending.
On its property business, the company said the sector is expected to remain challenging due to the weak consumer sentiment from the effect of the implementation of the goods and services tax, lower oil price and weaker ringgit, coupled with the continued stringent domestic mortgage approval.
“The group’s industry division is poised to gain from the expected increase in infrastructure spending under the Malaysian Economic Transformation Programme initiatives while embarking on prudent expansion programmes to further enhance its revenue and profit.”
IJM Corp also declared a first interim dividend of three sen per share, to be paid on Dec 23.
Meanwhile, IJM Corp’s subsidiary, IJM Plantations Bhd, reported a net loss of RM4.94mil in its second quarter ended Sept 30, compared with a net profit of RM27.10mil in the previous corresponding period, while revenue in the second quarter dropped to RM145.14mil compared with RM173.73mil a year earlier.
The company attributed weaker performance to lower commodity prices and lower sales volume.
“The group is exposed to the foreign currency exchange movement due to its US dollar denominated borrowings.
“The overall financial performance of the group was adversely impacted by the strengthening of the US dollar against the Indonesian rupiah in the second quarter of 2016 resulting in a net foreign exchange losses of RM45.9mil.”
For the six-months period ended Sept 30, IJM Plantations’ net profit dropped to RM17.92mil compared with RM53.22mil in the previous corresponding period, while revenue plunged to RM286.88mil from RM351.50mil a year earlier.
On its prospects, IJM Plantations said it expects the performance for the current financial year to be challenging due to the uncertain global demand scenario and the effect of the El Nino weather pattern which may lead to lower overall crop production.
“In Indonesia, notwithstanding the higher crop production from the increasing young mature areas, the business environment is expected to be impacted by the volatility of the foreign exchange rates and the recent introduction of the Indonesian palm oil export levy of US$50 per tonne.”
In a filing with Bursa Malaysia, the company said the improved earnings was mainly due to higher revenues contributed by the group’s construction, industry and infrastructure divisions.
For the six-months ended Sept 30, the company’s net profit increased to RM493.25mil from RM244.87mil in the previous corresponding period, while revenue however dipped to RM2.52bil from RM2.67bil a year earlier.
The company attributed the lower revenue during the six-months period to decreases in revenue from its property and plantation divisions.
On its prospects for the remainder of its current financial year, IJM Corp said its construction division is expected to perform satisfactorily on the current high level of its order book.
It said this was also underpinned by a relatively strong private sector demand in the domestic market, substantial ongoing development activities from the group’s in house property projects as well as the Malaysian government’s continued emphasis on infrastructure spending.
On its property business, the company said the sector is expected to remain challenging due to the weak consumer sentiment from the effect of the implementation of the goods and services tax, lower oil price and weaker ringgit, coupled with the continued stringent domestic mortgage approval.
“The group’s industry division is poised to gain from the expected increase in infrastructure spending under the Malaysian Economic Transformation Programme initiatives while embarking on prudent expansion programmes to further enhance its revenue and profit.”
IJM Corp also declared a first interim dividend of three sen per share, to be paid on Dec 23.
Meanwhile, IJM Corp’s subsidiary, IJM Plantations Bhd, reported a net loss of RM4.94mil in its second quarter ended Sept 30, compared with a net profit of RM27.10mil in the previous corresponding period, while revenue in the second quarter dropped to RM145.14mil compared with RM173.73mil a year earlier.
The company attributed weaker performance to lower commodity prices and lower sales volume.
“The group is exposed to the foreign currency exchange movement due to its US dollar denominated borrowings.
“The overall financial performance of the group was adversely impacted by the strengthening of the US dollar against the Indonesian rupiah in the second quarter of 2016 resulting in a net foreign exchange losses of RM45.9mil.”
For the six-months period ended Sept 30, IJM Plantations’ net profit dropped to RM17.92mil compared with RM53.22mil in the previous corresponding period, while revenue plunged to RM286.88mil from RM351.50mil a year earlier.
On its prospects, IJM Plantations said it expects the performance for the current financial year to be challenging due to the uncertain global demand scenario and the effect of the El Nino weather pattern which may lead to lower overall crop production.
“In Indonesia, notwithstanding the higher crop production from the increasing young mature areas, the business environment is expected to be impacted by the volatility of the foreign exchange rates and the recent introduction of the Indonesian palm oil export levy of US$50 per tonne.”