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Wednesday, August 27, 2008

IJM Corp still doing well despite challenging times

SUBANG JAYA: IJM Corp Bhd is still doing well despite the challenging times in the construction industry, said chief executive officer and managing director Datuk Krishnan Tan.

Datuk Krishnan Tan (right) and IJM Corp deputy CEO & deputy managing director Teh Kean Ming at the AGM.

Continuous focus would be placed on securing overseas jobs to contribute further to the company’s order book, he told reporters after its AGM and EGM yesterday,

The company announced yesterday a net profit of RM129.1mil for its first quarter to June 30, against a loss of RM728.9mil in the same period a year earlier.

Revenue improved to RM1.22bil from RM1.11bil previously, while earnings per share stood at 10.65 sen compared with a loss per share of 89.34 sen.

On the West Coast Expressway project undertaken in a joint venture with Kumpulan Europlus Bhd, Tan said he expected some delays as there was a double-digit increase in the cost of building materials.

IJM has a 25% stake in Europlus.

Tan said that in the Middle East, the company was bidding for two jobs in Bahrain, one in Dubai and two in Abu Dhabi worth more than RM1bil.

Its current order book is estimated at about RM5bil, of which 50% were contracts from India and the Middle East.

On the proposed listing of IJM (India) Infrastructure Ltd (IJMII) on the National Stock Exchange of India. Tan said the company had deferred it but ultimately IJMII would be listed.

“The environment in India, which contributes 30% of our order book, has changed substantially over the last six months to a year due to rising costs.

“Interest rate has also gone up to as high as 13% in India, thus affecting both the cost of doing business and demand from prospective property buyers,” Tan said.

IJM’s expressway project, which starts from Chilkaluripet to Vijayawada in Andhra Pradesh, India, requires a capital expenditure of RM900mil.

Total construction cost is RM550mil and the concession spans 15 years.

“Originally the two-lane road was to be expanded to four lanes.

“Now the Indian authorities want six lanes,” said Tan.

By The Star

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