IJM Corp 2Q net profit surges 533% amid disposal gains, declares 17 sen per share dividend

TheEdge Mon, Nov 29, 2021 06:26pm - 2 years View Original


KUALA LUMPUR (Nov 29): IJM Corp Bhd’s net profit surged 533% to RM629.3 million for the second quarter ended Sept 30, 2021, from RM99.36 million in the previous year’s corresponding quarter, helped by gains arising from the disposal of subsidiaries.

Quarterly revenue, however, fell 28% to RM874.25 million from RM1.22 billion a year earlier.

The group declared an interim dividend of two sen per share, as well as a special dividend of 15 sen per share for the quarter, which will be payable on Dec 30.

In its filing with the bourse, the group attributed the lower operating revenue to the reimposition of the nationwide lockdown, which had restricted business activities for most of the quarter.

However, it recorded gains of RM639.4 million arising from the disposal of subsidiaries.

IJM said its construction segment posted a 40% drop in revenue contribution amid lower construction activities during the lockdown period, which coupled with foreign exchange (forex) losses, translated into an 81% drop in pre-tax profit contribution.

The property development segment also saw a decline in pre-tax profit amid lower revenue and work progress caused by the lockdown and forex losses.

Meanwhile, the manufacturing and quarrying division posted a 201% surge in pre-tax profit due to higher gross profit margins, coupled with recognition of the one-off gain arising from the disposal of a subsidiary.

The plantation segment also performed well amid higher commodity prices during the quarter, as well as the gain from the disposal of IJM Plantations Bhd.

The infrastructure segment, on the other hand, saw a drop in profit contribution due to lower revenue and forex losses.

For the six months ended Sept 30, IJM's cumulative net profit jumped 585% to RM694.98 million, while revenue climbed 1% to RM1.91 billion from RM1.89 billion.

On its prospects, the group said it expects its performance to gradually improve in the second half of its financial year, as business restrictions continue to be lifted, given that most of the states it operates in are under Phase 4 of the National Recovery Plan (NRP).

“The construction division’s outstanding order book currently stands at RM4.51 billion. The performance of the group’s construction division is expected to improve with the resumption of construction activities,” it said.

The industry division’s performance will also improve, in line with the resumption of construction activities, it said.

The property market will benefit from the ongoing Home Ownership Campaign, the low interest rate regime, as well as the recent reduction of the Real Property Gains Tax, said IJM, and coupled with its product mix and unbilled sales in hand, it expects its property division to recover with the resumption of business activities post lockdown.

It added that the performance of its port operations will depend on the pace of recovery of its customers’ business activities, while the group’s toll operations are expected to see a rebound in traffic volumes, following the relaxation of the movement controls under the NRP.

“The group’s performance for the second half of FY22 is expected to recover with the reopening of business activities under the NRP,” it said.

IJM's share price rose four sen or 2.3% to RM1.79 on Monday (Nov 29), giving the group a market capitalisation of RM6.53 billion.

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