IJM sees challenging time in construction sector in 2019

By SHAHEERA AZNAM SHAH / Pic By MUHD AMIN NAHARUL

IJM Corp Bhd’s outlook for the construction segment in the coming year is expected to be more challenging due to the projected slowdown in the property market along with the after-effects of halted government projects.

Its CEO and MD Datuk Soam Heng Choon said the subdued sentiment in the market has also prompted construction firms to consolidate their operations.

“As we can see, according to what has been reported about the property market, it is now time for a consolidation.

“The construction sector is facing a slowdown because of the fewer projects by the government and the slower property market,” he said at the launch of Pantai Sentral Interchange in Kuala Lumpur (KL) yesterday.

Soam said at present, IJM Corp has a total of RM8.8 billion worth of outstanding orderbook, which will keep the company busy for the next three years.

“Despite the slowdown, we already have RM8.8 billion worth of outstanding orderbook that will last another three years,” he said at the official launch of the Pantai Sentral Interchange in KL yesterday.

However, he added that IJM Corp is expected to realise the gains throughout its financial year 2019 (FY19) as most of its projects are at the initial stage.

“Most of the construction projects in our outstanding orderbook are in the initial stage where we are doing the foundation work.

“Once we have completed the foundation, the progress will be much faster and the recognition of the turnover and profit will be better,” he said.

The group recently saw a decline in net profit by 80% in its second quarter of 2019 (2Q19), which was attributed to the losses to higher foreign- exchange (forex) losses.

“Our numbers are down for the last two quarters because of the impairment from our toll highway that we sold and the huge forex loss through our exposure in Indonesia and India.

“In the last one month, rupiah has trended from 15,400 rupiah (RM4.44) to about 14,500 rupiah, while rupee has trended from about 74 rupees to 70 rupees (RM4.20).”

As for the Pantai Sentral Interchange, which spans over 2.8km connecting the Pantai Sentral Park development to the New Pantai Expressway, Soam said  it would serve Pantai Sentral Park and other community with smoother drives in and out of their homes and offices and going out of the Klang Valley.

“We hope the interchange will complement the development and add road capacity to the extensive network of major roads and highways,” Soam added.

Soam said the opening of the interchange will complement residential condominiums at Pantai Sentral Park and Inwood Residences, of which 211 units are ready to be handed out in 1Q19.

He added that the second phase of another residential project at the Pantai Sentral Park, Secoya Residences, which comprises 243 units of residential condominium, is expected to be completed over the next couple of months.