IJM confident of doing well but may defer projects

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IJM Corp Bhd (3336), a construction-to-plantation firm, believes it can continue to perform well although some of its projects, particularly in the property sector, will be shelved due to the sluggish global economy, its chief said.

Managing director and chief executive officer Datuk Krishnan Tan said continuous focus would be placed on securing overseas jobs.

Tan said IJM can maintain strong order books as governments normally introduce stimulus packages during trying times to boost domestic spending.

"In a market where there are uncertainties, governments will create stimulus packages to (subsequently) put money into consumers' pockets. One effort is to stimulate the construction activities. Hence, we will be able to replenish our orders," Tan said after IJM's extraordinary general meeting in Subang Jaya yesterday.
IJM's order book is currently estimated at RM4.6 billion, half of it from India and the Middle East. Tan is bullish over IJM's prospects in India as there are many infrastructure works planned by its government.

Furthermore, the company may get some reprieve from the fall in prices of building materials and commodities like oil, bitumen and cement there.

"In the last nine months, prices of building materials in India had soared, putting pressure on our margins," he said.

In the Middle East, the company is still waiting for the outcome of its tenders. It is bidding for two jobs in Bahrain, two in Abu Dhabi and one in Dubai worth more than RM1 billion.

IJM recently announced a net profit of RM129.1 million for its first quarter to June 30, against a loss of RM728.9 million in the same period a year earlier.

Tan reiterated that the company had deferred the planned listing of IJM (India) Infrastructure Ltd on the National Stock Exchange of India.

At the EGM, shareholders approved the company's plan to buy the remaining shares in subsidiary Industrial Concrete Products Bhd (ICP) it does not already own.

Tan said as of Monday, IJM's shareholding in ICP rose to 89.3 per cent, from 63.39 per cent originally when the buyout was made.

"We can see the response is strong," he said.

The offer was supposed to close today but has been extended to November 17 to enable more shareholders to participate in the exercise. IJM is paying 26 sen cash and issuing 0.6 new share for every ICP share under the offer.