Wednesday, August 24, 2011

IJM Corp expects order book to reach RM9b

KUALA LUMPUR: IJM CORPORATION BHD [] reported a stronger set of results in the first quarter ended June 30, with earnings at more than RM115 million while it expected its total order book to reach RM9 billion.

It said on Wednesday, Aug 24 that net profit rose 34% to RM115.03 million from RM85.74 million a year ago, underpinned by earnings growth in the CONSTRUCTION [] and industry divisions.

Revenue increased 4.8% to RM1.033 billion from RM986.08 million mainly due to the construction, industry, PLANTATION [] and infrastructure divisions.'' Earnings per share were 8.51 sen compared with 6.43 sen.

Earlier, its managing director and chief executive officer Datuk Teh Kean Ming said IJM Corp had an order book of RM3.7 billion and expected it to increase substantially with its West Coast Expressway (WCE) and the New Pantai Expressway (NPE) expansion.

"Barring any unseen circumstances, we hope to see our order book to potentially come up to RM9 billion with the recognition of WCE and NPE extension projects," he said after the group's AGM.

The WCE and NPE jobs are estimated to be valued at RM4 billion and RM1 billion respectively.

He said IJM Corp would focus on local projects due to encouraging prospects for infrastructure initiatives under the Economic Transformation Programme.

IJM Corp had submitted a prequalification bid for the mass rapid transit project and it is teaming up with a foreign partner to bid for the non-tunneling portion as well.

Analysts have estimated the total MRT to be worth RM20 billion.

"We would focus on local projects rather than overseas. It is not conducive to take up any jobs in India at the moment due to the high interest rates and escalation of material costs," he said.

He added that IJM Corp has made the necessary provisions for its India projects in the fourth quarter ended March 31, 2011 and that should not be any more provisions for it.

"The provisions were done according to FRS139. But this does not mean we are writing off our debts. We would do the write-backs whenever we get our receivables for our project in India. But that would be no more write-offs," he said.

He said IJM Corp was also buying the minority stakes of two of its Indian toll concessionaires so it could realise its full potential earnings.

It currently holds a 35% stake in the Swarna tollway and a 49% stake in the Chilkaluripet-Vijayawada tollway.

"While these tolled roads are still loss-making (which is usual for new tolls), we expect higher returns to come as Indian toll tariffs are increased every year based on the country's inflation," he said.


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