IJM well on track

WHILE the financial year ended March 31, 2026 (FY26) has undoubtedly been a challenging one, IJM Corp Bhd is picking up the positives, as it continues to rebuild its momentum for the next fiscal period.

Aside from developing a new dividend policy of least 40% of core profit after tax and minority interest for its policyholders in FY26, group chief executive (group CEO) and managing director Datuk Lee Chun Fai acknowledges that IJM Corp is emerging from a period of recalibration.

In an email interview with StarBiz 7, he says it is essential to separate structural issues from temporary ones,.

He points out that the results in FY26 was primarily affected by specific factors within the group’s property and infrastructure segments, as well as foreign exchange movements.

“It was not a deterioration of the group’s overall operating performance.”

The bright spots

Lee observes that FY26 has, in fact, been a milestone year for IJM Corp from an operational standpoint.

The group delivered a record revenue of RM6.9bil, driven primarily by its construction division, whose turnover grew 41% year-on-year to RM3.6bil, supported by a larger order book and accelerating activity in industrial building and data centre projects.

“Our industry division also delivered its fourth consecutive record year with pre-tax profit of RM207.9mil.

“We believe the headline result does not reflect the underlying performance of the business,” he says, explaining that FY26 was also the year the group chose to address a number of legacy issues decisively.

These, he reveals, include impairment of certain inventories including Hui Hai Plaza in China and a maintenance provision for the group’s Indian tollway.

Alongside unrealised foreign exchange movements on overseas borrowings, the aforementioned factors had weighed on IJM Corp’s FY26 results.

“Adding back these one-off adjustments, our businesses actually generated RM1.19bil in core earnings before interest, tax, depreciation and amortisation.

“We ended the year with a RM14.7bil construction order book, the highest in IJM Corp’s history, and an RM18bil tender book,” Lee notes.

“Together with an accelerating billing cycle from fast-track projects, these are expected to support stronger revenue growth in FY27.”

Moreover, he points out that the group’s property segment is entering FY27 with RM2.2bil in unbilled sales, providing further earnings visibility.

At the same time, he says several businesses that weighed on FY26 are expected to improve, citing that IJM Corp’s Kuantan Port throughput is expected to recover following the completion of major maintenance works by a key customer in April 2026.

“Throughput has been temporarily affected by major maintenance undertaken by a key customer,” he adds.

“With those works now completed, we anticipate volumes to recover and we are actively pursuing new cargo streams and opportunities from East Coast industrial growth and the East Coast Rail Link ecosystem.”

Lee says that the West Coast Expressway (which is owned by West Coast Expressway Sdn Bhd, which in turn is 80% owned by WCE Holdings Bhd of which IJM Corp holds over 28%) is on track for completion by end-2026, with IJM Corp progressing initiatives to unlock value and recycle capital across the portfolio.

Strategies for FY27

For its property business, the group CEO reports that IJM Corp has taken the necessary impairments on certain inventories, including assets in China.

The group’s Malaysian business delivered RM126.5mil in pre-tax profit and RM1.68bil in new sales, meeting the board’s target for the FY26.

Lee says: “The costs associated with nurturing our investment properties and our joint ventures in the United Kingdom reflect deliberate long-term investments in building our future income-generating portfolio.

“More notably, the divisional loss was entirely non-cash.

“Going forward, the focus is on improving sales velocity, unlocking value from selected land parcels and prioritising developments with stronger demand and faster turnaround profiles.”

Meanwhile, he says IJM Corp has made a deliberate strategic decision to exit the India market.

The conglomerate has already received a formal offer for its Vijayawada land and was in active discussions with financial advisers and potential buyers for its toll concessions.

Exiting India, Lee says, would allow IJM Corp to reduce earnings volatility, free up capital and focus on markets where it has a stronger competitive advantage and better returns.

Back home, he says 55% of the group’s construction order book wins in FY26 has come from industrial buildings and data centre projects, although Lee emphasises that IJM Corp is remaining selective.

“Winning projects is important, winning the right projects is more important,” adds Lee.

“We continue to see healthy demand in Johor, Penang and the Klang Valley, alongside reemerging opportunities in semiconductor manufacturing, logistics and advanced industrial facilities.

“Our strategy is to build capabilities across the full industrial ecosystem, and that is what gives us staying power beyond any single cycle.”

According to him, the group’s RM18bil tender book reflects breadth across data centres, industrial buildings, healthcare and infrastructure.

Increasing payouts for shareholders

Moreover, Lee says the group’s new dividend policy reflects its confidence in its underlying earnings profile, cash generation capability and capital discipline.

“We want shareholders to have greater visibility and certainty on distributable returns.

“The policy is anchored to core earnings and is designed to be sustainable across business cycles, with the potential for special dividends as assets mature and are monetised,” he explains.

“IJM Corp’s earnings base that underpins this improved policy is solid.”

Having declared a total dividend of eight sen per share for FY26, even in a year the group took significant non-cash write-downs, Lee says investors have long recognised the quality of IJM Corp’s assets, but not necessarily their full value.

“The initiatives we announced are aimed at narrowing that gap and we are already executing.

“We enter FY27 with greater clarity on the portfolio, a stronger order book and a clearer pathway for value realisation.

“Construction and industry are well-positioned to sustain their momentum, our toll assets provide steady recurring income, while property and port are expected to deliver improved performance in FY27.”

Analysts have remained positive on the stock, with UOB Kay Hian Research, RHB Research, MBSB Research and CGS International Research among a slew of research houses that maintain effective “buy” calls on the counter.