IJM’s 2QFY18 results elicit mixed response from analysts, key difference stems from plantation and property

KUALA LUMPUR: Analysts across the board are mixed over IJM Corporation Bhd’s (IJM) second quarter of financial year 2018 (2QFY18) results, with some declaring that expectations were missed while others said they were within expectations.

AmInvestment Bank Bhd (AmInvestment Bank) shared that IJM’s core net profit of RM250.5 million in its first half of FY18 (1HFY18) has sorely missed expectations, meeting only 41 and 38 per cent of theirs and consensus full-year forecasts respectively.

“We believe the key variance against our forecast came from the weaker-than-expected plantation and building material profits,” said the bank.

Similarly, MIDF Amanah Investment Bank Bhd (MIDF Research) reported in a separate report that IJM’s net profit for the first six months of FY18 (6MFY18) has accounted for only 36.2 and 36.6 per cent of theirs and consensus’ full-year forecasts respectively.

However, the research arm instead attributed the negative deviation to the unexpected decline in IJM’s planation and infrastructure segments on the back of a higher tax rate which saw a +4.5 point increase to 32.0 per cent.

Based off MIDF Research’s report, IJM’s profit before tax (PBT) in its plantation segment saw a drop of -26.0 per cent year over year (y-o-y) to RM18.2 million, while its infrastructure segment saw a drop of -19.0 per cent y-o-y to RM35.7 million.