Highlight IJM Corp 2Q profit at RM140m, declares 4 sen dividend

by **Cals** Wed 27 Nov 2013, 00:13

Highlight IJM Corp 2Q profit at RM140m, declares 4 sen dividend

Business & Markets 2013

Written by Zatil Husna of theedgemalaysia.com of theedgemalaysia.com

Tuesday, 26 November 2013 18:37

KUALA LUMPUR (Nov 26): IJM Corporation Bhd reported a slightly higher net profit for the second quarter ended Sept 30, 2013 (2QFY13), rising 2.2% year on year.
The group’s net profit for the second quarter increased to RM140.30 million, from RM137.26 million in the second quarter of the previous financial year.
But its revenue rose sharply to RM1.41 billion from RM1.14 billion.

The company declared a single-tier first interim dividend of four sen for the quarter under review.

In its filing and notes to the stock exchange today, IJM Corp said although it posted a rise in net profit, its pre-tax profit actually declined 11% to RM207.6 million compared to the corresponding quarter of the preceding year.
The reason given was that the group’s plantation and infrastructure divisions were severely hit by unrealised foreign exchange losses arising from a stronger US dollar.
The group suffered unrealised foreign exchange losses totalling RM34.7 million in the quarter under review as opposed to an unrealised foreign exchange gain of RM22.8 million in the corresponding quarter of the preceding year.

IJM Corp noted the group’s effective tax rate for the second quarter was lower than the statutory tax rate mainly due to certain income not being subject to tax, such as the gain on disposal of investments.

For the first half period, the group’s profit jumped to RM304.64 million, from RM226.09 million previously.
Revenue rose to RM2.81 billion from RM2.18 billion.

Looking ahead, IJM Corp said it expects its construction to perform satisfactorily on the current order book.

“The measures introduced in the recent 2014 Budget as well as Bank Negara Malaysia’s new guidelines to promote sustainability of the property market have created some uncertainties in the property market.

“However, given the wide array of affordable products and strategic location nationwide, combined with strong unbilled sales in hand of approximately RM1.3 billion the
property division is expecting to deliver a good performance for the current financial year.”

The group expects sales of its industry division’s building materials to grow in tandem with increased construction activity in Malaysia.

But it expects the profitability level of its plantation division for the current financial year to be impacted by prices and other factors.

The group’s toll, port, power and water operations are expected to provide growing recurrent revenue streams thereby further enhancing the bottom line of the group’s Infrastructure division.

However, increasing volatility in global capital markets and the resultant foreign exchange fluctuations may continue to impact the group’s results, it said.

“As a result of these factors, and barring any unforeseen circumstances, the group expects to achieve a satisfactory performance for the current financial year,” said IJM Corp.