IJM Corporation Berhad · MYX:IJM
IJM Corporation Berhad — Shareholder Meeting (August 2016)
91 slides from IJM Corporation Berhad's shareholder meeting presentation, Aug 24, 2016
Slide 1: 32nd Annual General Meeting
32nd Annual General Meeting Review of Group Performance & Prospects Financial Year Ended 31 March 2016 24 August 2016
Slide 2: Contents
Contents Business Review FY2016 Group Performance Segmental Performance Reviews & Outlook Corporate Responsibility Marketplace Environment Community Workplace Concluding Remarks Questions & Answers 2
Slide 3: Group Income Statement
Group Income Statement Full Year RM mil %∆ FY2016 FY2015 Revenue 5,128.2 5,448.3 (5.9) Operating profit 1,301.5 1,292.4 0.7 Finance cost (169.2) (242.7) Operating profit after finance cost 1,132.2 1,049.7 Share of results from JV & associates 23.6 (30.3) Profit before tax 1,155.8 1,019.4 13.4 Taxati
Slide 4: Group Balance Sheet
Group Balance Sheet RM Mil 31-Mar-16 31-Mar-15 Share capital 3,584.8 1,500.0 Shareholders’ funds 9,028.4 8,429.6 Total assets 19,835.6 19,730.7 Net assets per share (RM) 2.52 5.62 Total cash 1,679.5 1,911.3 Total borrowings 5,844.6 6,154.8 Net cash / debt* (4,165.1) (4,243.6) Net debt / shareholders
Slide 5: Annual Group Revenue by Division
Annual Group Revenue by Division RM mil FY2016 FY2015 2,500.0 2,203.4 2,000.0 1,643.0 1,500.0 1,224.3 1,290.0 1,295.0 982.8 926.8 1,031.4 1,000.0 667.7 557.6 500.0 14.5 10.1 - Construction Property Industry Infrastructure Plantation Others Infrastructure Plantation Plantation Infrastructure 22% 10%
Slide 6: Annual Group EBITDA by Division
Annual Group EBITDA by Division RM mil FY2016 FY2015 800.0 766.4 700.0 600.0 524.7 500.0 400.0 307.7 300.0 237.8 242.6 189.5 173.2 170.9 188.3 200.0 126.2 95.7 82.6 100.0 - Construction Property Industry Infrastructure Plantation Others Plantation Plantation 8% Others Infrastructure 12% 6% 20% Other
Slide 7: Annual Group PBT by Division
Annual Group PBT by Division RM mil FY2016 FY2015 600.0 555.8 494.7 500.0 400.0 300.0 200.0 170.6 184.8 159.3 124.1 125.6 89.4 95.7 82.6 100.0 50.4 42.3 - Construction Property Industry Infrastructure Plantation Others Plantation Infrastructure Plantation 4% Others 4% 9% Others 8% Industry 8% 12% 48
Slide 8: Construction Snapshot
Construction Snapshot Full Year RM mil %∆ FY2016 FY2015 Revenue 1,643.0 1,224.3 34.2 EBITDA 237.8 242.6 (2.0) Profit / Loss before tax 170.6 184.8 (7.7) PBT % 10.4% 15.1% Comments Full year revenue increased over the corresponding period following higher contribution from projects that were secure
Slide 9: Order Book at a Record High
Order Book at a Record High 100% FY2017 Contract Awarded Buildings 26% May 2016 Other Infra IJM-CHEC JV Kuantan Breakwater 80% Contract Value: RM176.4m Roads MRT 2 (Jinjang to Jalan Ipoh) 31% Contract Value: RM1.47bn 60% Outlook 40% Outlook for order book 42% replenishment is positive, althoug
Slide 10: WCE-Package 4
WCE-Package 4 (NKVE/FHR2-NNKSB1) Progress Installation of Rebar for Bottom Slab & Multicellular Deck Web of Multicellular Deck 10 Construction
Slide 11: WCE-Package 5
WCE-Package 5 (NNKSB1-Kapar) Progress Installation of 300mm Spun Piles Installation of Stone Column Installation of Prefabricated Vertical Drain Concreting of Piled Embankment Slab 11 Construction
Slide 12: WCE-Package 8
WCE-Package 8 (Hutan Melintang-Teluk Intan) Progress Beam Launching Work for Span Concreting of Columns Construction of Precast Plank Concrete Casting Work for Bridge Plinth 12 Construction
Slide 13: WCE-Package 9
WCE-Package 9 (Kg. Lekir-Changkat Cermin) Progress Embankment of Earth Filling in Progress View of Bridge Beam Installed Across Existing Ipoh-Lumut Highway Culvert Construction in Progress at RS Wall Construction in Progress Changkat Cermin 13 Construction
Slide 14: MRT Line 1
MRT Line 1 Taman Midah Station Taman Pertama Station Taman Mutiara Station Taman Connaught Station 14 Construction
Slide 15: University of Reading Malaysia, Johor
University of Reading Malaysia, Johor 15 Construction
Slide 16: JKG Tower, Kuala Lumpur
JKG Tower, Kuala Lumpur 16 Construction
Slide 17: Property Snapshot
Property Snapshot Full Year RM mil %∆ FY2016 FY2015 Revenue 1,290.0 2,203.4 (41.5) EBITDA 189.5 524.7 (63.9) Profit / Loss before tax 159.3 494.7 (67.8) PBT % 12.3% 22.5% Comments Revenue, PBT & PBT margin for the year were lower due to slower take up rate, lower gross profit margin as well as com
Slide 18: Land Bank Profile
Land Bank Profile Penang: 313 acres GDV: RM6.0bn Sabah: 318 acres Pahang: 675 acres GDV: RM2.4bn GDV: RM0.8bn Klang Valley: 1,258 acres GDV: RM10.5bn Seremban: 1,412 acres GDV: RM3.7bn Melaka: 4 acres Changchun, China: 2.0 acres GDV: RM0.1m Johor: 722 acres GDV: RM0.5bn GDV: RM5.7bn London, UK: 3.0
Slide 19: Sales Achieved
Sales Achieved Sales Figure Outlook RM’mil 3,000 RM2.8bn The property market is facing some headwinds as a result of 23% more stringent end-financing 2,500 criteria imposed by banks as 3% well as weaker consumer 2,000 11% RM1.7bn sentiment resulting from higher 4% 3% cost of living 14% 10% RM1.4bn
Slide 20: Periwinkle Residence, Bandar Rimbayu
Periwinkle Residence, Bandar Rimbayu 20 Property
Slide 21: Seri Riana Residence, Kuala Lumpur
Seri Riana Residence, Kuala Lumpur 21 Property
Slide 22: Pantai Sentral Park, Kuala Lumpur
Pantai Sentral Park, Kuala Lumpur 22 Property
Slide 23: Saujana Duta, Seremban
Saujana Duta, Seremban 23 Property
Slide 24: The Light Collection III - Waterways
The Light Colletion III - Waterways 24 Property
Slide 25: Industry Snapshot
Industry Snapshot Full Year RM mil %∆ FY2016 FY2015 Revenue 982.8 926.8 6.0 EBITDA 173.2 170.9 1.3 Profit / Loss before tax 124.1 125.6 (1.2) PBT % 12.6% 13.6% Comments Full year revenue improves as a result of a 13.7% increase in the delivered tonnage of piles compared to the previous year. Full
Slide 26: Capacity & Locations
Capacity & Locations Capacity Outlook 10 Pile Factories Record order 2.0m tonnes p.a Kuala Terengganu book for piles Junjung Jawi Ipoh Division to 10 Quarries Lumut continue to 8.0m tonnes p.a benefit from Kuantan Kuang large scale Kapar Labu infrastructure Klang projects in Nilai Malaysia Jiang
Slide 27: New Ready Mixed Concrete Plant, Klang
New Ready Mixed Concrete Plant, Klang 27 Industry
Slide 28: ICP Piles at North Port, Port Klang
ICP Piles at North Port, Port Klang 28 Industry
Slide 29: Gebeng Quarry, Kuantan
Gebeng Quarry, Kuantan 29 Industry
Slide 30: New Deep Water Terminal, Kuantan Port
New Deep Water Terminal, Kuantan Port Size of Piles – Diameter 600mm & 1,200mm Acropodes for Breakwater 30 Industry
Slide 31: Temburong Bridge, Brunei
Temburong Bridge, Brunei Approximately 14.5km Size of Piles – Diameter 1,000mm 31 Industry
Slide 32: RAPID Project
RAPID Project RAPID Package 3 Tecnicas Reunidas RAPID Package 2A/B SINOPEC, First Project to Successfully Convert Square Piles to Spun Piles Deep Water Terminal, Dialog RAPID Package 5, Toyo Engineering 32 Industry
Slide 33: Infrastructure Snapshot
Infrastructure Snapshot Full Year RM mil %∆ FY2016 FY2015 Revenue 1,295.0 1,031.4 25.6 EBITDA 766.4 307.7 149.1 - Malaysian Tollways 220.9 179.3 - Port 277.7 181.2 - Overseas Infrastructure 267.8 (52.8) Profit / Loss before tax 555.8 42.3 1213.9 - Malaysian Tollways 114.1 55.8 - Port 250.6 140.9 - O
Slide 34: Infrastructure Snapshot
Infrastructure Snapshot Comments Revenue for the full year has increased substantially compared to previous year following continued traffic growth in Malaysian toll road concessions (Besraya & NPE) and higher cargo revenue being recorded by the port concession The one-off gains from the disposa
Slide 35: Concession Assets Portfolio
Concession Assets Portfolio Concession Assets Type % Share Period Operating New Pantai Expressway, Selangor Tollway 20 km 100% 1996 – 2030 Besraya & Extension, Selangor Tollway 29 km 100% 1996 – 2040 Malaysia LEKAS, Kajang-Seremban Tollway 44 km 50% 2007 – 2039 Kuantan Port, Pahang Port 60% 1998 – 2
Slide 36: New Deep Water Terminal Progress
New Deep Water Terminal Progress Reclamation works Dredging works Berth construction Breakwater works 36 Infrastructure
Slide 37: Loke Yew Toll Plaza, Besraya
Loke Yew Toll Plaza, Besraya 37 Infrastructure
Slide 38: Mines Utara Toll Plaza, Besraya
Mines Utara Toll Plaza, Besraya 38 Infrastructure
Slide 39: Toll Plaza at Swarna Tollway
Toll Plaza at Swarna Tollway 39 Infrastructure
Slide 40: Western Access Tollway, Argentina
Western Access Tollway, Argentina 40 Infrastructure
Slide 41: Plantation Snapshot
Plantation Snapshot Full Year RM mil %∆ FY2016 FY2015 Revenue 557.6 667.7 (16.5) EBITDA 126.2 188.3 (33.0) Profit / Loss before tax 50.4 89.4 (43.6) PBT % 9.0% 13.4% Average CPO price per tonne 2,142.0 2,289.0 FFB Yield Per Hectare (tonne) 20.8 25.6 OER % 21.2% 20.9% Comments Revenue for the year
Slide 42: Operations Profile
Operations Profile Sabah Kalimantan Sumatera 59,595 ha 21 848,059 mt Total Planted Area No. of Estates FFB Production (FY16) 4 219,504 mt No. of Mills Crude Palm Oil (FY16) 42 Plantation
Slide 43: Plantation Age Profile
Plantation Age Profile 44% Malaysia 8% Indonesia 25,051 ha 34,544 ha 27% IJM Plantations 8% 34% 59,595 ha 77% FFB Yield: 20.8 mt 70% FFB Yield: 14.6 mt 7% OER: 21.2% OER: 24% 3% 19% 3% Outlook CPO price outlook has turned positive in the short term Expansion of land bank in Indonesia progressing
Slide 44: Minat Teguh Estate, Sabah
Minat Teguh Estate, Sabah 44 Plantation
Slide 45: Desa Telisai Palm Oil Mill, Sabah
Desa Telisai Palm Oil Mill, Sabah 45 Plantation
Slide 46: Rakanan Jaya North Estate, Sabah
Rakanan Jaya North Estate, Sabah 46 Plantation
Slide 47: Corporate Responsibility
Corporate Responsibility Dato’ Soam and Mr Joseph Tek accepting the Top 10 Disclosure Merit Recognition Award for IJM Corporation Berhad and IJM Plantations Berhad at the MSWG- ASEAN Corporate Governance Transparency Index, Findings & Recognition 2015 Awards Dato’ Soam receiving the award for ‘Highe
Slide 48: Corporate Responsibility
Corporate Responsibility IJM Corporation Berhad is recognised as one of five Malaysian companies listed among ASEAN Top 50 for good corporate governance at the ASEAN Corporate Governance Awards 2015 IJM Construction won three awards at the Malaysian Construction Industry Excellence Awards (“MCIEA”)
Slide 49: Corporate Responsibility
Corporate Responsibility Dato’ Soam receiving the Industry Excellence Award – Construction Sector from D.Y.M.M. Sultan Nazrin Shah Ibni Al-Marhum Sultan Azlan Shah, HRH Sultan of Perak and Deputy Prime Minister of Malaysia, Dato’ Seri Dr Ahmad Zahid Hamidi at Utusan Business Awards 2015 Dato’ Soam,
Slide 50: Corporate Responsibility
Corporate Responsibility IJM Land won three awards at The Star Property Awards 2016 namely, WOW (The Light Waterfront, Penang), Family-Friendly (Bandar Rimbayu) and one of the Top Ranked Developers Annual ‘Walk with CEO’ at IJM Plantations activity with group of investors, industry fraternity and an
Slide 51: Corporate Responsibility
Corporate Responsibility ‘Sejuta Pohon’ greening programme was initiated at Kutai Timur region, Indonesia River water quality monitoring programme is implemented in all operating units 51 Environment
Slide 52: Corporate Responsibility
Corporate Responsibility Green development in The Light Collection III Waterways in Penang Green development in Linear Garden at Debunga Residensi 52 Environment
Slide 53: Corporate Responsibility
Corporate Responsibility The replacement of conventional street lighting with low-impact Light Emitting Diode (LED) street lights in NPE is completed, while the installation are in progress for Besraya and LEKAS which are targeted to be completed by end 2016. LED street lights are known to have high
Slide 54: Corporate Responsibility
Corporate Responsibility Mangrove forest preservation are crucial for coastal areas In promoting awareness and enthusiasm among children on the protection of threatened birds, IJM Plantations in collaboration with Borneo Bird Club Sandakan, initiated a Bird Conservation awareness outreach project at
Slide 55: Corporate Responsibility
Corporate Responsibility An annual event, the IJM Give Day Out initiative with 2015 theme ‘Play Around Playground’ with the aim to address the issue on the lack of proper and safe playgrounds for children to socialise and be connected with their friends was held simultaneously at every location wher
Slide 56: Corporate Responsibility
Corporate Responsibility IJM Land spreads Chap Goh Mei cheer at Seremban 2 with fireworks display Cycling event organised in IJM’s township developments 56 Community
Slide 57: Corporate Responsibility
Corporate Responsibility After (the house and toilet) IJM’s Home Before (the house and toilet) Rehabilitation Programme had reconstructed the badly damaged house at Taman Tunku Ampuan Najihah in Seremban to a brand new house Tan Sri Dato’ Krishnan Tan with Dato’ Soam at the press conference for the
Slide 58: Corporate Responsibility
Corporate Responsibility Executive mentoring session Critical Analysis training programme for participants in Northern region 58 Workplace
Slide 59: Corporate Responsibility
Corporate Responsibility Dato’ Soam having his casual meet-up with scholars and Graduate Associates Career talk conducted at Universiti Teknologi Petronas 59 Workplace
Slide 60: Corporate Responsibility
Corporate Responsibility ‘We Care’ Run at LEKAS Highway for the Toll Division Various sports, social and welfare activities are organised throughout the year through the Group’s Kelab Sukan IJM 60 Workplace
Slide 61: IJM Business Strategy
IJM Business Strategy Short-Term Strategy Long-Term Strategy Continue Domestic Growth Continued Focus On Core Agenda Competencies execution of existing order book & proven track record in execution land bank to underpin earnings Strengthen Regional Presence focus on infrastructure projects s
Slide 62: Concluding Remarks
Concluding Remarks Malaysian market outlook is mixed Short-term – challenging Long-term – expanding capacity Selective participation in overseas construction tenders Diversity in earnings base to provide sustainable growth in shareholder value over the long term Overall business environmen
Slide 63: Questions & Answers
Questions & Answers Question 1a. The Chairman's Statement reported that the Group's operating results for its core segments namely property and plantation recorded much declined pre-tax profits except for the Infrastructure segment. How sustainable is the Infrastructure Division's performance given
Slide 64: Questions & Answers
Questions & Answers Reply 1a. The Infrastructure Division’s existing portfolio of concession assets is expected to continue to provide recurrent revenue streams and profitability. Whilst the heightened regulation on bauxite related activities will impact cargo throughput at Kuantan Port in the immed
Slide 65: Questions & Answers
Questions & Answers Reply 1a. After the disposals of some of the Divisions toll concessions in India in FY2016, the Group, to further enhance the sustainability of the Division’s performance, will continue to explore fresh and suitable investment opportunities in this sector, in line with the Group’
Slide 66: Questions & Answers
Questions & Answers Question 1b. Amid the Group's 99.9% equity interest in Chilkaluripet-Vijayawada Tollway since May 2016, how long is the concession period, how profitable is this Tollway, and would the Board plan to dispose this Tollway in near future? 66 Questions & Answers
Slide 67: Questions & Answers
Questions & Answers Reply 1b. The Chilkaluripet-Vijayawada Tollway incurred a small loss in the financial year ended 31 March 2016 due to the commencement of amortisation post receipt of the completion certificate during the financial year. Whilst the concession is currently seeing encouraging traff
Slide 68: Questions & Answers
Questions & Answers Question 1c. What are the Board's measures to uplift the performances of Besraya, NPE and LEKAS (a joint venture company) due to weaker traffic performance and escalating operating costs amid the Board's cost-effective measures by implementing the LED street- lights and the ETC s
Slide 69: Questions & Answers
Questions & Answers Reply 1c. Traffic volume at Besraya and NPE continue to be resilient given the maturity of the urban corridors they serve respectively. Whilst traffic at LEKAS continues to be impacted by the widening toll rate disparity with North-South Expressway following the increase in toll
Slide 70: Questions & Answers
Questions & Answers Reply 1c. The Group continues to implement disciplined cost controls through the use of energy saving technology such as LED street-lights and fully automated Electronic Toll Collection (ETC) systems which enhance road safety and is consistent with the Group’s sustainability effo
Slide 71: Questions & Answers
Questions & Answers Question 1d. In what ways, the Construction Division plays its role and benefits from the development of the New Deep Water Terminal Project ("NDWT") Phase 1 with its partner, Guangxi Beibu amid the new Alliance Steel mill plant in MCKIP under construction? How much is the develo
Slide 72: Questions & Answers
Questions & Answers Reply 1d. The construction of the NDWT undertaken by the Construction Division mainly includes reclamation and building of new berths, dredging works as well as building a section of the breakwater. However, the construction of the new Alliance Steel mill plant in MCKIP does not
Slide 73: Questions & Answers
Questions & Answers Reply 1d. The construction of the NDWT and the development of MCKIP is expected to contribute positively to the revenue and earnings of the Group’s Construction, Property, Industry and Infrastructure Divisions in the future. For the year ended 31 March 2016, revenue and earnings
Slide 74: Questions & Answers
Questions & Answers Question 1e. What are the benefits and opportunities accruing to the Group and the Infrastructure Division's port concession amid the regulation of the bauxite mining activities and the decrease in bauxite export performance? 74 Questions & Answers
Slide 75: Questions & Answers
Questions & Answers Reply 1e. Whilst Kuantan Port has adhered to high standards in the maintenance of its operating environs, heightened regulation on bauxite related activities, starting with the imposition of the current moratorium on bauxite mining from January 2016, had permitted Kuantan Port th
Slide 76: Questions & Answers
Questions & Answers Reply 1e. Although the moratorium on bauxite mining will have an adverse impact on cargo throughput, the existence and eventual clearing of approximately 4 million tons of stockpile outside the Port is expected to provide future revenue streams in the near term. 76 Questions & An
Slide 77: Questions & Answers
Questions & Answers Question 2a. The CEO's Review of Operations reported that the Property Division's pre-tax profits decreased 68% amid weak responses to its new launches for projects due to the soft market and dampened consumers' sentiment, property cooling measures and banks' stringent lending ru
Slide 78: Questions & Answers
Questions & Answers Reply 2a. The Property Division had adopted a more measured stance to launching new projects as it began to place greater emphasis on inventory and cash management since early FY2016. This is evidenced by the shift of new launches to mid-range landed products, fewer acquisitions
Slide 79: Questions & Answers
Questions & Answers Question 2b. What are the Board's measures to boost the Property Division's performance and earnings amid slower economic growth, weakened Ringgit, impact of GST and low crude oil prices? 79 Questions & Answers
Slide 80: Questions & Answers
Questions & Answers Reply 2b. Despite the tougher market, reasonably priced homes are still in demand given the young demography of the country. As such, the Property Division has focused much of its efforts towards bridging the affordability gap by launching more mass market products, offering fina
Slide 81: Questions & Answers
Questions & Answers Question 2c. What are the outlook and expected development values of the Division's on-going projects namely Phase 1, Royal Mint Gardens in London amid Phase 2 to be launched and Hui Hai International, an 8-storey retail & commercial complex in Xi'An Avenue in the People Square,
Slide 82: Questions & Answers
Questions & Answers Reply 2c. Phase 1 of Royal Mint Gardens, London, was launched in 2013 with an expected development value of GBP200 million. The project is substantially sold and currently under construction. Phase 2 is now under re-planning from a hotel cum residential block to a predominantly r
Slide 83: Questions & Answers
Questions & Answers Question 3. The Industry Division's Manufacturing & Quarrying did not show improved results as it faced with tough competition for its ready- mixed concrete, P.C. piles and other R.C. products, as well as reduced turnover in quarry business. Given that the piles division's order
Slide 84: Questions & Answers
Questions & Answers Reply 3. Prospects of the Industry Division are encouraging on the back of its healthy order book, bolstered by ongoing Government spending on infrastructure projects in Malaysia as well as projects undertaken by the IJM Group. 84 Questions & Answers
Slide 85: Questions & Answers
Questions & Answers Question 4a. The share of results of associates recorded profits to turn around from the previous year’s losses. What is the status of Board's concession agreement re-negotiations for the Group's 20%-owned Grupo Concesionario del Oeste S.A. ("GCO"), a 21-year concession of the 56
Slide 86: Questions & Answers
Questions & Answers Reply 4a. The concession agreement re-negotiations with the Argentinian Government are still on-going. 86 Questions & Answers
Slide 87: Questions & Answers
Questions & Answers Question 4b. In what ways would the Group's 20%-owned Gautami Power in India and 36%-owned Binh An Water Corporation Ltd in Vietna contribute to regular and stable income streams until 2023 and 2019 respectively? 87 Questions & Answers
Slide 88: Questions & Answers
Questions & Answers Reply 4b. Whilst Binh An Water continues to be profitable, Gautami Power is currently constrained by the shortage of gas supply, which once stabilised, is expected to contribute regular income streams until the end of its concession period. 88 Questions & Answers
Slide 89: Questions & Answers
Questions & Answers Question 5. Amid the lower than expected palm oil prices, crop production/productivity affected by the prolonged dry weather and labour shortage, does the Board see better or below expectations of the Plantation Division's performance? 89 Questions & Answers
Slide 90: Questions & Answers
Questions & Answers Reply 5. For FY2017, subject to the extent of the lag-effect of the El-Nino experienced in the previous financial year, a marginal recovery of FFB production is expected for the Malaysian operations. FFB production for the Indonesian operations would be boosted by the larger area
Slide 91: Thank You
Thank You 91
IJM Corporation Berhad — Shareholder Meeting (August 2016) on 6ix