IJM UPBEAT ON CONSTRUCTION DIVISION
Firm expects better performance starting from second half of next year
IJM Corp Bhd expects its construction division to perform better from the second half of next year as its current projects are still at the initial or foundation stages.
Chief executive officer and managing director Datuk Soam Heng Choon said the overall construction sector in Malaysia was in a consolidation phase due to a cut or delay in government projects and a slower property market.
“We have RM8.8 billion outstanding construction order book with over RM2.1 billion unbilled sales, which will keep us busy for the next three years.
“However, the projects are largely at the initial or foundation stages like the Affin Bank (headquarters), UOB Tower and Mitsui Shopping Mall.
“Once the foundation stages are completed, the progress will be faster and then the recognition of the turnover and profit will be better,” he said on the sidelines of the Pantai Sentral Park Interchange launching ceremony, here, yesterday.
Deputy Works Minister Mohd Anuar Mohd Tahir officiated at the ceremony. Also present was head director of Malaysian Highway Authority Datuk Aziz Abdullah.
On the property market, Soam said the group, was expected to also continuously launch new projects. It has developed two big townships, namely Seremban 2 in Negri Sembilan and Bandar Rimbayu in Shah Alam.
However, the local property market was expected to remain challenging as the key issues of price affordability, overhang in high-rise residences, rising cost of living and tight financing would continue to have a dampening effect, he said.
For the second quarter ended September 30, IJM Corp reported an 80.8 per cent drop in net profit to RM21.92 million due to weaker earnings posted by all its major divisions, compared with RM114.23 million profit a year ago.
The group’s construction, property development, manufacturing and quarrying, plantations and infrastructure divisions all posted weaker earnings in the quarter.
Soam said the weaker performance for the quarter was due to impairment of its toll highway in India, which had been sold.
He also cited foreign exchange losses due to the plantation sector ’s exposure in Indonesia as well as depreciation in the Indian rupee.