IJM Corporation’s financial year 2023 headline net profit included unrealised foreign exchange loss, mainly for USD borrowings of its Indian toll roads and impairment of WCE RUMS (a financial instrument).
Excluding that and other one-offs, Maybank Investment Bank Bhd (Maybank IB) estimated a core net profit of RM338 million which was above their expectation at 112% of their financial year 2023 estimate.
“We trim financial year 2024 estimate earnings by 4% post house-keeping, raise the financial year 2025 estimate by 7%, and introduce the financial year 2026 estimate. Our new revalued net asset value-trading price is RM2.18 (+4sen). BUY,” said Maybank IB in a recent report.
The beat in quarter four core profit, relative to Maybank-IB’s forecasts, was due to land sale gain of RM63 million, cost review of property projects at RM70 million and strong margins at industry ops, which offset losses at the infrastructure ops due to major resurfacing cost for an Indian toll road.
Construction revenue was down 30% year-on-year in financial year 2023 as new projects were in the initial stage of progress. Property contributed 76% to financial year 2023 group profit before tax as profit was 3.7x that of financial year 2022.
Industry profit before tax was 2.2x that of financial year 2022 on higher selling prices, strong volume sale for piles and margin improvement from greater productivity. A 2nd interim dividend per share of 4 sen and a special 2 sen take the financial year 2023 dividend per share to 8 sen.
Outstanding construction order book stood at RM4.5 billion as at 31 Mar 2023, with RM1.5 billion new jobs secured in financial year 2023, short of its RM3 billion target for financial year 2023. The internal job win target for financial year 2024 is RM3 billion.
“We are confident of a role by IJM in the KVMRT3 works. At its property ops, financial year 2023 property sales was RM2.7 billion and it targets a modest RM2 billion in sales for financial year 2024 on RM2.9 billion of planned launches. Unbilled sales were RM3 billion,” said Maybank IB.
Group strategic focus is unchanged under the new CEO, to build resilience, drive growth, nurture capabilities. Longer term growth plans include expansion of ops to adjacent businesses, for example, warehouses, industrial building construction, and wellness.
Geographical reaches include UK, East Malaysia, especially Sarawak, and Indonesia, towards Nusantara, via joint ventures or partnerships. It is also exploring private finance initiatives-type of projects.
