IJM Corporation Berhad · MYX:IJM
IJM Corporation Berhad — Shareholder Meeting (August 2017)
65 slides from IJM Corporation Berhad's shareholder meeting presentation, Aug 23, 2017
Slide 1: 33rd Annual General Meeting
33rd Annual General Meeting Review of Group Performance & Prospects Financial Year Ended 31 March 2017 Dato’ Soam Heng Choon, Chief Executive Officer & Managing Director 23 August 2017
Slide 2: Contents
Contents Business Review FY2017 Group Performance Segmental Performance Reviews & Outlook Sustainability at IJM Marketplace Community Environmental Workplace Conclusion Concluding Remarks Questions & Answers Minority Shareholder Watchdog Group 2
Slide 3: FY2017 Group Income Statement
FY2017 Group Income Statement FY2017 RM mil %∆ FY2017 FY2016 Revenue 6,065.3 5,128.2 18.3 EBITDA 1,457.7 1,588.7 (8.2) Operating profit 1,081.6 1,301.4 Finance cost (144.7) (169.2) Operating profit after finance cost 936.9 1,132.2 Share of results from JV & associates 73.1 23.6 Profit before tax 1,0
Slide 4: FY2017 Group Balance Sheet
FY2017 Group Balance Sheet RM Mil 31-Mar-17 31-Mar-16 Share capital 6,022.7 3,584.8 Shareholders’ funds 9,497.3 9,028.4 Total assets 20,892.7 19,835.5 Net assets per share (RM) 2.63** 2.52 Total cash 2,147.8 1,679.5 Total borrowings 6,003.8 5,844.7 Net cash / debt* (3,856.0) (4,165.2) Net debt / sha
Slide 5: FY2017 Group Revenue by Division
FY2017 Group Revenue by Division RM mil 2,532 FY2017 FY2016 2,600 2,400 2,200 2,000 1,800 1,643 1,600 1,516 1,400 1,290 1,295 1,200 1,137 983 976 1,000 754 800 558 600 400 200 4 14 - Construction Property Industry Infrastructure Plantation Others Infrastructure Plantation Infrastructure Plantation 1
Slide 6: FY2017 Group EBITDA by Division
FY2017 Group EBITDA by Division RM mil 800 FY2017 FY2016 766 700 600 500 400 322 282 285 258 300 238 190 194 173 200 126 117 96 100 - Construction Property Industry Infrastructure Plantation Others Plantation Others Plantation 18% 8% 8% Others 6% FY17 19% Construction FY16 Infrastructure 20% RM1.46b
Slide 7: FY2017 Group PBT by Division
FY2017 Group PBT by Division RM mil FY2017 FY2016 600 556 500 400 303 300 217 200 171 159 169 142 124 117 96 100 62 50 - Construction Property Industry Infrastructure Plantation Others Plantation Plantation 17% Others 4% Others 12% 8% Infrastructure 6% FY17 Infrastructure 48% FY16 15% Construction R
Slide 8: Construction Snapshot
Construction Snapshot FY2017 RM mil %∆ FY2017 FY2016 Revenue 2,532.1 1,643.0 54.1 EBITDA 282.0 237.8 18.6 Profit before tax 216.7 170.6 27.1 PBT % 8.6 10.4 Comments Revenue and PBT increased over the corresponding period as the physical progress of certain major projects continued to contribute si
Slide 9: Order Book at near Record High
Order Book at near Record High 100% Buildings FY18 Contracts Awarded July 2017 Other Infra IJM-CHEC JV Kuantan Breakwater 80% 36% Contract Value: RM280m Roads UOB Tower 2 60% Contract Value: RM450.9m 30% Outlook 40% Outlook for order book replenishment is encouraging. We can therefore be more
Slide 10: MRT 1 Phase 2 – Launched 17 July 2017
MRT 1 Phase 2 – Launched 17 July 2017 10 Construction
Slide 11: Puteri Cove Residences, Johor
Puteri Cove Residences, Johor 70% completed with target completion by end-2018 11 Construction
Slide 12: Equatorial Plaza, Kuala Lumpur
Equatorial Plaza, Kuala Lumpur Equatorial Plaza at Level 52, Projected Structure Topping Out on 25 August 2017 12 Construction
Slide 13: Property Snapshot
Property Snapshot FY2017 RM mil %∆ FY2017 FY2016 Revenue 1,516.2 1,290.0 17.5 EBITDA 321.7 189.5 69.7 Profit before tax 303.3 159.3 90.4 PBT % 20.0 12.3 Comments Revenue and PBT increased significantly due to contribution from the recognition of the sale of a 32-acre land situated at the Light Wat
Slide 14: Property Sales Achieved
Property Sales Achieved Outlook Seeing some improvement in buyer sentiment although stringent end-financing criteria imposed by banks are still in place Township and landed developments, namely Bandar Rimbayu, Shah Alam 2 and Seremban 2, to underpin sales 14 Property
Slide 15: Rimbayu, Riana Dutamas & Riana South, The Waterside Residence
Rimbayu,Riana Dutamas & Riana South Klang Valley & The Waterside Residence, Penang Livia Double-Storey, Riana Dutamas, Segambut Riana South, Phase A, Rimbayu Cheras The Waterside Residence, The Light Waterfront, Penang Total - 118 units Total – 536 units Launched – May 2017 Target launch – Oct/Nov 2
Slide 16: The Light Waterfront, Penang
The Light Waterfront, Penang Phase 2 Phase 1 The Light City The Residential Integrated Mixed-Use Precinct Development GDV – RM1.8bn GDV – RM4.5bn 42.0 acres 32.8 acres Iconic Integrated Development 16 Property
Slide 17: The Light City, Penang (Phase 2)
The Light City, Penang (Phase 2) Joint Venture between IJM Corp (50%) and Perennial Real Estate (50%), with a total GDV of RM4.5bn Hotels Office Towers Residential Towers Penang Waterfront Residential Towers The Mezzo Convention Centre The Essence Retail Retail Retail 17 Property
Slide 18: Industry Snapshot
Industry Snapshot FY2017 RM mil %∆ FY2017 FY2016 Revenue 1,136.6 982.8 15.7 EBITDA 194.1 173.2 12.1 Profit before tax 142.4 124.1 14.8 PBT % 12.5 12.6 Comments Revenue and profit before tax increased, mainly due to increases in the delivered tonnage of piles and quarry products 18 Industry
Slide 19: Capacity & Locations
Capacity & Locations Capacity Outlook 10 Pile Factories Record order book Kuala Terengganu 2.0m tonnes p.a Junjung for piles Jawi Ipoh Division to 9 Quarries Lumut continue to benefit 8.0m tonnes p.a from large scale Kuantan Kuang infrastructure Kapar Labu projects in Klang Malaysia Nilai Pote
Slide 20: Projects
Projects ICP Piles used at Ferry Terminal, Temburong Bridge, Brunei Sanya, Hainan Ready Mixed Concrete Plant at Whitefield, India Armour Rocks at Gebeng Quarry 20 Industry
Slide 21: Infrastructure Snapshot
Infrastructure Snapshot FY2017 RM mil %∆ FY2017 FY2016 Revenue 975.5 1,295.0 (24.7) EBITDA 284.8 766.4 (62.8) - Malaysian Tollways 210.5 220.9 - Port 102.0 277.7 - Overseas Infrastructure (27.7) 267.8 Profit before tax 62.3 555.8 (88.8) - Malaysian Tollways 93.1 114.1 - Port 66.4 250.6 - Overseas In
Slide 22: Kuantan Port 5-Year Throughput
Kuantan Port 5-Year Throughput Existing Port Capacity – 26 million FWT 22 Infrastructure
Slide 23: 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 24: Rationale for NDWT Expansion
Rationale for NDWT Expansion 1. Nearing existing port capacity of 26m FWT 2. Rapid industrial developments in MCKIP 3. Need for deeper port to accommodate carriers up to 150,000 DWT 4. Development of transhipment capabilities 24 Infrastructure
Slide 25: New Deep Water Terminal
New Deep Water Terminal Public-Private Partnership Initiative NDWT Existing Port Existing New Breakwater Breakwater Artist Impression Government of Malaysia Kuantan Port Consortium • 4.63 km Breakwater • Capital Dredging • External infrastructure • Land Reclamation • Road, Water, Electricity Supply
Slide 26: New Deep Water Terminal Layout
New Deep Water Terminal Layout (a) 4.63 km NEW BREAKWATER BY GOVERNMENT SOUTH CHINA SEA SOUTH CHINA SEA DREDGING AREA (BASIN) PHASE 1 – 16m DEPTH DREDGING AREA (CHANNEL) 600m PHASE 2 – 18m DEPTH PHASE 1 – 17m DEPTH PHASE 2 – 19m DEPTH BERTH BERTH PHASE 1 PHASE 2 1000m Berth 1000m Berth RECLAMATION P
Slide 27: New Deep Water Terminal Progress
New Deep Water Terminal Progress Reclamation and Dredging works Reclamation Berth construction 27 Infrastructure
Slide 28: Kuantan Port Proximity to China
Kuantan Port Proximity to China Synergy creation between Kuantan Port & Qinzhou Port Qinzhou 钦州 Tieshan Port Guangxi Beibu Gulf Port Kuantan Port 关丹港 Estimated shipping time from Kuantan Port to: •Qinzhou Port 3–4 days •Other Chinese Ports 4–8 days 28 Infrastructure
Slide 29: Malaysia-China Kuantan Industrial Park
Malaysia-China Kuantan Industrial Park Rationale MCKIP 1st Malaysia National Industrial Park G2G Industrial Park, with sister park Malaysia Consortium China Consortium of China-Malaysia Qinzhou 51% 49% Industrial Park IJM Land 40% Guangxi Beibu 95% One Belt One Road Sime Darby 30% Qinzhou 5%
Slide 30: East Coast Rail Line (ECRL)
East Coast Rail Line (“ECRL”) 30 Infrastructure
Slide 31: MCKIP 1 Phase 1 - 1st Investment Project
MCKIP 1 Phase 1 - 1st Investment Project Alliance Steel (M) Sdn Bhd, a modern iron and steel plant is currently under construction. 710 acres Modern High Carbon Steel and H- Integrated Steel Mill shape Steel Total Production Output 3.5 million tonnes RM5.6 billion Investment annually 31 Infrastructu
Slide 32: Alliance Steel Progress
Alliance Steel Progress 32 Infrastructure
Slide 33: Investors in MCKIP & Kuantan Port
Investors in MCKIP & Kuantan Port Guangxi Zhongli Alliance Steel Enterprise Group Co., Ltd. Steel Mill Clay Porcelain Investment Value: Investment Value: RM5.6bn NewOcean Energy RM2.0bn Holdings Zkenergy (Yiyang) Guangxi Investment Group Oil Refinery New Resources Science Co., Ltd. Investment Value:
Slide 34: Plantation Snapshot
Plantation Snapshot FY2017 RM mil %∆ FY2017 FY2016 Revenue 753.7 557.6 26.8 EBITDA 258.4 126.2 104.7 Profit before tax 168.5 50.4 179.0 PBT % 22.4 9.0 CPO Price* 2,753 2,142 FFB Yield 20.0 20.8 OER % 20.5 21.2 Comments Revenue and PBT increased mainly due to higher CPO prices that have risen compa
Slide 35: Operations Profile
Operations Profile Sabah Kalimantan Sumatera 60,600 ha 862,435 mt 211,680 mt Total Planted Area FFB Production (FY17) Crude Palm Oil (FY17) 35 Plantation
Slide 36: Plantation Age Profile
Plantation Age Profile 7% 4% 4% 9% 19% 14% 10% Indonesia IJM Malaysia 35,281 ha 33% 25,319 ha Plantations 60,600 ha FFB Yield: 20.0mt FFB Yield: 13.9mt OER: 20.5% OER: 21.8 49% 77% 74% Outlook CPO price outlook is currently positive Expansion of land bank in Indonesia progressing well. As at end
Slide 37: Sustainability at IJM
Sustainability at IJM 37 Sustainability Process
Slide 38: Sustainability targets
Sustainability targets TARGET FINANCIAL YEAR Corporate Establish a Group Board-approved sustainability roadmap to 2018 drive policy developments, implementation and strategy Marketplace 2018 Establish robust customer engagement measurement system Environment 2018 Perform a carbon footprint assessmen
Slide 39: Stakeholder Engagement
Stakeholder Engagement Various stakeholders (local and foreign) visited Kuantan Port & MCKIP as it is a significant infrastructure project, being undertaken by Chinese investors under G2G initiative 39 Marketplace
Slide 40: Security is High on the Group Matrix
Security is High on the Group Matrix Property Crime prevention through environmental design Industry Handling explosives at quarry sites Port International Ship and Port Facility Security (ISPS) Toll Rest area security 40 Marketplace
Slide 41: Environmental Concerns
Environmental Concerns Facilities enhancements, such as dedicated washing bays, sedimentation ponds and drainage facilities, were also introduced. Specific measures implemented at the Port, including best practices for bauxite handling and facilities such as washing bays, have been used as reference
Slide 42: Managing Our Environmental Footprint
Managing Our Environmental Footprint Solar Panels installed on Jawi Factory Rooftop LED Streetlights installed at Besraya Highway We strive to be custodians of the ecosystems we operate in Concrete Reclaimer installed at Ulu Choh Factory 42 Environmental
Slide 43: Contribution To Community
Contribution To Community IJM land Half Marathon Give Day Out Before RHB-Shimano Highway Ride Home Rehabilitation Programme After 43 Community
Slide 44: Stable & Engaged Workforce
Stable & Engaged Workforce 44 Workplace
Slide 45: Health, Safety and Environment (HSE)
Health, Safety and Environment (HSE) Safety Net Fan installed at On Job Training Equatorial Plaza Health, Safety And Environment Is Everyone's Responsibility Signing the Pledge during HSE Campaign 45 Workplace
Slide 46: Innovation
Innovation THINK INFINITY Innovation Partners 46 Workplace
Slide 47: Concluding Remarks
Concluding Remarks Malaysian market outlook is encouraging Short-term – buoyed by active construction sector Long-term – expanding capacity eg. Kuantan Port, WCE and The Light Phase 2 Executing the high construction order book Selective participation in overseas construction tenders Diver
Slide 48: Minority Shareholder Watchdog Group Questions & Answers
Minority Shareholder Watchdog Group Questions & Answers 48
Slide 49: Question 1a
Question 1a As reported recently, the government is mulling the enactment of a new law to make it a mandatory requirement for the construction sector to switch to industrialised Building System (IBS) within the next four years. a) What are the expected challenges to the Group in applying the IBS wit
Slide 50: Answer 1a
Answer 1a The Group is already using IBS, which is a technique of construction whereby components are prefabricated and later assembled at the construction site. IJM's IBS journey started about 30 years ago through the adoption of the Crendon Building System (a modular steel formwork system) for mas
Slide 51: Answer 1a continued
Answer 1a continued There are 2 main challenges faced by construction industry players: i. The understanding of IBS varies not just among industry players but also stakeholders such as developers and consultants who may not adopt designs that are IBS friendly; ii. The lack of capabilities in the sup
Slide 52: Question & Answer 1b
Question & Answer 1b As reported recently, the government is mulling the enactment of a new law to make it a mandatory requirement for the construction sector to switch to industrialised Building System (IBS) within the next four years. b) Would the requirement of IBS change the business strategies
Slide 53: Question & Answer 2a
Question & Answer 2a During the financial year (FY) 2017, the Property Division focused on customising their products to match the needs of their customers and disposing off the current inventories on hand. a) Considering weak market sentiment, stringent loan requirements, increasing cost of living
Slide 54: Question & Answer 2b & 2c
Question & Answer 2b & 2c During the financial year (FY) 2017, the Property Division focused on customising their products to match the needs of their customers and disposing off the current inventories on hand. b) What is the latest take-up rate for the projects launched in FY2017? The latest take-
Slide 55: Question & Answer 3a
Question & Answer 3a ) For FY2017, the New Pantai Expressway (NPE) recorded a revenue of RM164.83 million and a profit before tax (PBT) of RM94.38, representing a profit margin of 57% whereas the Besraya Highway (Besraya) recorded a revenue of RM119.31 million and a PBT of RM28.71 million, represent
Slide 56: Question & Answer 3b
Question & Answer 3b ) For FY2017, the New Pantai Expressway (NPE) recorded a revenue of RM164.83 million and a profit before tax (PBT) of RM94.38, representing a profit margin of 57% whereas the Besraya Highway (Besraya) recorded a revenue of RM119.31 million and a PBT of RM28.71 million, represent
Slide 57: Question & Answer 4a
Question & Answer 4a During the FY2017, moratorium on bauxite mining in Kuantan had caused significant drop in cargo throughput for Kuantan Port. The revenue of Kuantan Port was 60% lower than FY2016 and its pre-tax profit declined by 73%. a) With further extension of moratorium period on bauxite mi
Slide 58: Question & Answer 4b
Question & Answer 4b During the FY2017, moratorium on bauxite mining in Kuantan had caused significant drop in cargo throughput for Kuantan Port. The revenue of Kuantan Port was 60% lower than FY2016 and its pre-tax profit declined by 73%. b) What are the steps or measures taken to mitigate the risk
Slide 59: Question & Answer 5a
Question & Answer 5a Durabon Sdn Bhd (DSB), an indirect subsidiary, involves in processing and sales of steel bars, achieved a revenue of RM112.4 million, an increase of 13% from FY2016. However, PBT was lower by 9% to RM4.07 million due to competition from imported Chinese PC Bars. DSB will continu
Slide 60: Question & Answer 5b
Question & Answer 5b Durabon Sdn Bhd (DBS), an indirect subsidiary, involves in processing and sales of steel bars, achieved a revenue of RM112.4 million, an increase of 13% from FY2016. However, PBT was lower by 9% to RM4.07 million due to competition from imported Chinese PC Bars. DBS will continu
Slide 61: Question & Answer 5c
Question & Answer 5c Durabon Sdn Bhd (DBS), an indirect subsidiary, involves in processing and sales of steel bars, achieved a revenue of RM112.4 million, an increase of 13% from FY2016. However, PBT was lower by 9% to RM4.07 million due to competition from imported Chinese PC Bars. DBS will continu
Slide 62: Question 6
Question 6 Under Resolution 9, the Company tabled for payment of Directors’ benefits to the Non-Executive Directors up to an amount of RM520,000 for the period from 31 January 2017 until the next Annual General Meeting for shareholders’ approval. Could the Board provide the breakdown of the amount R
Slide 63: Answer 6
Answer 6 In accordance with the provisions of the Companies Act 2016, the Directors’ benefits for all the Non-Executive Directors are being presented for shareholder approval in Resolution 9. Whilst there has been no change in the rate of these benefits to the Non-Executive Directors, the amount of
Slide 64: Answer 6 continued
Answer 6 continued The amount of RM181,000 for FY 2017 (as shown on page 106 of the 2017 Annual Report) consists of actual benefits-in-kind paid for both Executive Directors (RM79,000) and Non-Executive Directors (RM102,000) comprising the travel claims of Non-Executive Directors and the car benefit
Slide 65: Thank You
Thank You
IJM Corporation Berhad — Shareholder Meeting (August 2017) on 6ix