Latest news with #IJM
The Star
3 days ago
- Business
- The Star
IJM continues to target more job wins for FY26
PETALING JAYA: IJM Corp Bhd is aiming for a higher project replenishment target for its financial year 2026 (FY26) despite missing its target again in its FY25 ended March 31, analysts say. UOB Kay Hian Research (UOBKH Research) said that the construction and property group guided for a higher replenishment range of between RM6bil and 7bil in FY26 after the release of its FY25 results, which beat expectations. A decent chunk of the replenishments will be from the delayed New Pantai Expressway (NPE) extension worth RM1.4bil and government housing project in Nusantara, Indonesia, estimated at RM1bil. Other key replenishment opportunities include the Penang LRT, the Penang Airport and road projects in Sabah and Sarawak. For FY25, IJM reported a core net profit of RM526.9mil, up 55.5% year-on-year following recognition of major construction milestones that saw its construction-segment earnings picking up significantly during 4Q25. Otherwise, UOBHK Research said that property sales had softened due to delayed launches, while infrastructure earnings declined due to lower throughput for tolls and ports. The construction segment's order book came in at RM11.1bil, comprising RM6.6bil from local jobs and RM4.5bil from foreign jobs in Singapore and Britain. Total job replenishments for the division stood at RM2.7bil. Meanwhile, Hong Leong Investment Bank Research (HLIB Research) said the recent approval for the long-awaited RM1.4bil NPE extension project will lift the group's order book. 'With this win, IJM has hit 40% of our FY26 contract-win assumption and we anticipate more wins this year mainly from data centres and the Nusantara project in Indonesia. 'On the balance-sheet front, IJM's low net gearing of 0.28 times provides ample space to fund the projects,' HLIB Research said. According to the research house, the NPE extension project will be fully funded by the company with no financial commitment from the government. The 15km extension will be fully elevated, linking three major highways – IJM's existing NPE and Besraya highways – with the upcoming LIKE Expressway. Construction will begin in the third quarter of this year with completion slated in 2029. Once operational, the NPE extension is poised to add to IJM's recurring income stream, said HLIB Research. As for the group's property division, UOBKH Research said total property sales came in at RM1.5bil in FY25 as delayed launches back in 3Q25 resulted in sales coming in at the lower end of IJM's target. Unbilled sales stood at RM1.54bil and going forward, IJM is targeting RM2bil in sales in FY26 in line with its previous guidance prior to the delays. As for the group's British ventures, contributions from its newly acquired JRL Group Holdings Ltd could begin as early as FY26. 'The current construction churn rate for the JRL Group is around £400mil with net margins of between 2% and 3%. 'While JRL is currently loss-making, this is largely due to balance-sheet issues causing project delays, which should be solved via a capital injection,' UOBKH Research said. The research house has a 'buy' rating on the stock with a higher target price of RM3.15 from RM3 before.
New Straits Times
7 days ago
- Business
- New Straits Times
IJM Corp's construction book may expand to RM11bil with new deals
KUALA LUMPUR: IJM Corp Bhd is expected to see growth in its construction order book and a pickup in property earnings going into financial year 2026 (FY26). Hong Leong Investment Bank Bhd (HLIB Research) said the group's outstanding order book stands at RM6.6 billion, representing 2.6 times cover on FY25 construction revenue. The firm said IJM's effective order book could expand to RM11.1 billion, including contributions from construction associates JRL Group, which is pending completion, and Hexacon. "Contracts secured in FY25 amounted to RM2.7 billion, falling below management's guidance of RM5 billion, largely due to delays in the NPE extension. Nevertheless, IJM has started FY26 strongly, securing approval for the NPE extension worth RM1.4 billion. "Management is targeting a replenishment rate of RM6 billion to RM8 billion, backed by five to six data centre tenders, Penang LRT Segment 2, and airport jobs, in addition to NPE 2.0 and Nusantara PFI," it said in a note. HLIB Research also anticipates the potential conversion of two Nusantara private finance initiatives in FY26, namely the public housing project worth RM1.5 billion and the 26km multi-utility tunnel project. "In our view, IJM, possibly through a joint venture, could generate returns from availability charges. However, the conversion of the latter could spill over into FY27, in our view," it added. The research house remains upbeat on the group's longer-term prospects in the ports segment. This is supported by investments in MCKIP, the ECRL and the Phase 1 carbon capture, utilisation and storage project under the National Energy Transition Roadmap, which could add five million tonnes per annum of throughput. HLIB Research said toll volumes remained healthy in the fourth quarter and expressed confidence that the NPE restructuring will not result in toll rate cuts in the near term. It noted that IJM has also maintained that plans to monetise mature highways remain in place, though the timing remains uncertain. The firm has kept its 'Buy' call on IJM, raising its target price slightly to RM2.96 from RM2.92. "We continue to see trading opportunities in the stock given its valuation discount to peers, potential contract wins and monetisation news flow. "Key catalysts include contract awards, while risks involve unfavourable restructuring terms, high material costs and labour shortages," it said.
New Straits Times
26-05-2025
- Business
- New Straits Times
NPE extension set to unlock RM5.6bil in economic benefits: analysts
KUALA LUMPUR: The long-anticipated New Pantai Expressway (NPE) extension is expected to generate RM5.6 billion in economic spillover benefits and catalyse development in the Bangsar fringe area. The NPE extension has received official approval from the Ministry of Works, signalling a major step forward in Kuala Lumpur's infrastructure upgrade under the Traffic Master Plan 2030. IJM Corp Bhd confirmed that the RM1.4 billion project—initially cancelled in 2012—has been revived through renewed government engagement. As a fully private initiative, IJM will fund the construction in full. Spanning 15 kilometres, the fully elevated highway will connect the Pantai Dalam Toll Plaza to the Jalan Istana interchange via Jalan Syed Putra. The extension will enhance traffic flow by integrating the NPE with the Besraya and the upcoming Laluan Istana Kiara Expressway (by Ekovest). The improved link is expected to divert up to 40 per cent of traffic from Jalan Bangsar into central Kuala Lumpur. IJM currently holds a 34-year concession (with about 12 years left before the extension) for the 19.6-km NPE, a key corridor connecting Subang Jaya to the capital, with major toll points including Pantai Dalam, PJS2, and PJS5, as well as the Kuchai Link and Pantai Sentral Park interchange. The NPE was constructed between 2000 and 2004, with the expressway officially opening to traffic on April 30, 2004. The project was led by Road Builder (M) Holdings Bhd, which was acquired by IJM in 2007. Datuk Lee Chun Fai, IJM's group chief executive officer and managing director, said the approval marks a key milestone in the group's ongoing efforts to improve urban mobility throughout the Klang Valley. Other than NPE, IJM also wholly owns Besraya (M) Sdn Bhd, whose concession to operate the 28.9km Sungai Besi Highway ends in 2046 (previously 2040 before toll restructuring in 2022); a 50 per cent stake in Lebuhraya Kajang-Seremban Sdn Bhd, which has a concession to run the 44.3km Kajang Seremban Highway (Lekas) through 2064 (previously 2039); and an effective 41 per cent shareholding in the 233km West Coast Expressway Sdn Bhd, which is 80 per cent controlled by publicly traded WCE Holdings Bhd. IJM has a 26.65 per cent stake in WCE, and its wholly owned Road Builder has a 20 per cent direct stake in the West Coast Expressway. It also has four highways in India: the 79km Chilakaluripet-Vijayawada Tollway; the 19.8km Dewas Bypass Tollway (under construction); the 109km Solapur-Bijapur Tollway (under construction); and the 56km Western Access Tollway in Buenos Aires, Argentina. Brokerages have responded positively to the news. CIMB Securities said the project will immediately contribute RM1.4 billion in internal contracts to IJM's construction division while reinforcing its strategy to grow toll infrastructure assets and recurring income streams. For the nine months ended December 31, 2024, IJM's toll segment reported a 58 per cent year-on-year decline in core pre-tax profit to RM27.1 million, impacted by RM53 million in associate losses. NPE and Besraya collectively posted RM96 million in pre-tax profit, a 7.2 per cent YoY decline. CIMB maintained its 'Buy' rating on IJM, with an unchanged sum-of-the-parts-based target price of RM3.26. It said the project's RM1.4 billion contribution is within its FY26F new contract win estimate of RM4 billion. However, it has not yet factored in earnings contributions from the expanded concession pending further updates. Public Investment Bank Bhd also reaffirmed its 'Buy' call and TP of RM3.26, echoing that the brownfield project fits well with IJM's long-term toll infrastructure strategy and would deliver meaningful recurring revenue. "We make no changes to our earnings forecast, as the expected order book accretion of RM1.4 billion from the NPE extension is within our new contract win estimates of RM4 billion for FY26F. "Similarly, we have not factored in any contributions from the expanded NPE concession pending further updates on its operational parameters."
The Star
23-05-2025
- Business
- The Star
IJM Corp gets approval for RM1.4bil New Pantai Highway extension and toll restructuring
PETALING JAYA: IJM Corp Bhd has received approval from the Ministry of Works for the New Pantai Highway Extension and the toll restructuring for the existing New Pantai Highway. In a release, IJM noted the extension will have a new toll plaza and be funded by the concessionaire, New Pantai Expressway Sdn Bhd (NPESB). Construction works are expected to commence in the third quarter of 2025 and cost the group RM1.4bil to complete. The 15km highway extension is targeted to be operational by 2029. Meanwhile, the toll restructuring of the existing New Pantai Highway entails maintaining current toll rates until the expiry of the concession period. Apart from easing congestion, IJM stated the extension project is expected to generate economic spillover benefits of RM5.6bil, unlocking growth for nearby developments such as Pantai Sentral Park and Bangsar South. The existing New Pantai Highway or Expressway is a 19.6km dual carriageway developed by NPESB, a subsidiary of IJM Corp.
New Straits Times
23-05-2025
- Business
- New Straits Times
IJM gets ministry's nod to extend New Pantai Expressway by 15km at RM1.4bil cost
KUALA LUMPUR: IJM Corporation Bhd has received approval from Works Ministry for the extension of the New Pantai Expressway (NPE) and restructuring of toll rates for the existing stretch. The project will be undertaken by IJM's infrastructure toll division, which manages the group's highway concessions. According to IJM, the 15-kilometre fully elevated NPE extension (including directional ramps) is designed to improve connectivity, ease congestion and enhance mobility across key corridors in Klang Valley. By offering a direct alternative to city-centre routes, the highway will help shorten travel times and ease daily commutes for residents and businesses. The NPE Extension, with a new toll plaza, will be fully funded by the concessionaire without any government funding. Construction works is expected to commence in the third quarter of 2025 with the highway targeted to be operational by 2029. Toll restructuring of the existing NPE entails maintaining current toll rates until the expiry of the concession period. Meanwhile, the NPE extension will link the Pantai Dalam toll plaza directly to the Jalan Istana interchange via Jalan Syed Putra, interconnecting with three major expressways - NPE, Sungai Besi Expressway (Besraya), and the upcoming Laluan Istana-Kiara Expressway (LIKE). The project also aligns with Kuala Lumpur Traffic Master Plan 2040, which prioritises highway-to-highway connections that keep through-traffic out of the city core. The integrated network is expected to divert about 40 per cent of existing traffic from Jalan Bangsar towards the city centre, relieving pressure on some of Kuala Lumpur's busiest routes which expect to reduce travel time during peak hours upon completion. IJM group chief executive officer and managing director Datuk Lee Chun Fai said the approval marks an important milestone in the group's efforts to improve urban mobility in the Klang Valley. He added that the NPE extension is designed not only to disperse traffic more efficiently, but also to reduce travel time and support the everyday journeys of people and businesses by easing pressure on key city routes and complementing public transportation. Beyond easing congestion, the project is also expected to generate economic spillover benefits of about RM5.6 billion, unlocking growth for nearby developments such as Pantai Sentral Park and Bangsar South. To support future-ready commuting, the NPE Extension will incorporate smart infrastructure features such as Malaysia's multi-lane fast flow tolling system, integrated real-time CCTV monitoring, smart street lighting and a new layby with electric vehicle fast-charging stations. The NPE Extension also represents a brownfield extension of the group's existing concession asset, aligning with IJM's strategy of expanding and enhancing its infrastructure portfolio through well-managed, synergistic developments. Lee noted that the extension of the NPE concession provides an ideal mechanism to responsibly finance and deliver this project. "The NPE Extension also strengthens our recurring income base and fits well within our long-term strategy of managing and monetising infrastructure assets at the right time," he said. The NPE Extension will be undertaken at a construction cost of RM1.4 billion.
