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Results Note - IJM Land (ADD, maintain) - Weak results but good prospects




Affin Hwang Investment Bank Bhd


26 Feb 2013





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9MFY03/13 core net profit fell by 10%, below expectations IJM Land reported a weaker 9MFY03/13 core net profit of RM124.4m (-9.8% yoy) due to: (i) a higher effective tax rate of 28.6% (vs 25.9% in 9M12); (ii) higher loss from associates/ JCE of RM9.7m (vs RM5.1m loss in 9M12); and (iii) higher minority interest of RM10.7m (vs RM3.3m in 9M12). Taking into account the RM26.8m gains from the disposal of Menara IJM Land as well as a parcel of land and building in Penang, the group’s headline 9MFY13 net profit grew by 8.5% yoy to RM149.7m. Overall, the result is below both market and our expectations. The group’s 9MFY13 core net profit account for 59% of our full year core earnings forecast while its headline net profit account for 68% of consensus full year earnings. The key variance to our earnings projection is a higher-thanexpected effective tax rate. Also, slower-than-expected launches in new projects by associates/ JCE had resulted in losses in relation to pre-launch marketing expenses, overheads and other expenses.

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