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Wednesday, August 26, 2009

IJM expects to keep orderbook above RM4b

Malaysia's second biggest construction firm aims to bid for infrastructure projects that will be rolled out under government stimulus packages in Asia

IJM Corp Bhd, the country's second biggest construction company, expects to maintain an order book of more than RM4 billion as it bids for sizeable government contracts locally and abroad.

It aims to bid for infrastructure projects that will be rolled out under government stimulus packages in Asia. Governments around the world are spending more money to pull their economies out of recession.


"We would replenish the order book so that we maintain about RM4 billion plus at any one time. Since our chewing rate is about RM200 million a month, we have to (replenish) about RM2 billion plus a year," said IJM Corp managing director and chief executive officer Datuk Krishnan Tan Boon Seng.

He was speaking to reporters after the group's annual and extraordinary general meetings in Subang Jaya yesterday.
Some projects IJM Corp is eyeing include the new permanent low-cost carrier terminal in Sepang and the light rail transit (LRT) extension works in Kuala Lumpur.

"We do a broad range of work from civil engineering works to building. You will see us participating where there are sizeable jobs," said Tan, adding that the company was bidding for works here and abroad.

Tan said tenders for both the LCCT and LRT projects have yet to be called.

"For the LCCT, the pre-qualification process has been called and we have also submitted. We will look to bid for the sizeable packages (once the tender is open)," he said.

Tan also said that there will be other tenders from the Pahang-Selangor Water Transfer project, including the dams, intakes, ancillary infrastructure and the treatment plant.

On IJM Corp's property division, Tan said there are strong property sales yet to be billed and expects the division to perform decently given the wide range of products - retail, industrial, medium- and high-cost developments - in high density locations.

Meanwhile, the group saw its first quarter net profit decline 22.5 per cent to RM70.8 million while revenue slipped 5 per cent to RM1.16 billion.

In a Bursa Malaysia announcement, it said the lower earnings for the three-month period to June 30 2009 was due to lower contributions from its plantation division as crude palm oil prices fell.

Also, the construction division suffered lower margins from old contracts affected by higher costs in the previous year and higher financing costs incurred in India.

The plantation division earnings dipped as the group expedited its fertiliser application and repair cost for infrastructure due to heavy rainfall and floods.

"We don't think that the first quarter is reflective of the following quarters," said Tan. He added that the current fiscal year ending March 31 2010 would be similar to 2007, where the first quarter was lower but later quarters showed improvements.

By Business Times (by Jeeva Arulampalam)

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