RAM Ratings affirms IJM Corp's AA3/Stable sukuk rating

RAM Ratings has affirmed the AA3/Stable rating of IJM Corporation Berhad's (IJM Corp or the Group) RM3.0 bil Sukuk Murabahah Programme. We have also affirmed the AA3(s)/Stable/P1(s) ratings of its RM5.0 bil Islamic Medium-Term Notes Programme and Islamic Commercial Papers Programme issued under funding vehicle IJM Treasury Management Sdn Bhd. The issue ratings reflect the credit profile of IJM Corp as the provider of an irrevocable and unconditional guarantee based on the shariah principle of Kafalah.

The affirmations are based on the expectation that IJM Corp's credit metrics will remain commensurate with its ratings, anchored on healthy earnings visibility from its outstanding construction order book and unbilled sales. The Groups diversified businesses and sturdy track record in the local construction and property sectors are key rating strengths, complemented by a sound balance sheet and strong liquidity and financial flexibility. Moderating the ratings are IJM Corp's contingent exposure to a 41% stake in the delayed West Coast Expressway and its vulnerability to foreign exchange and interest rate movements, given the Groups foreign currency-denominated floating rate debts.

New construction jobs secured in FY Mar 2024 amounted to a higher RM3.7 bil, with new contracts worth RM1.9 bil in 5M FY Mar 2025 maintaining this momentum. Comprising a mix of infrastructure jobs and industrial facilities, the new contracts brought IJM Corp's outstanding construction order book to a robust RM6.6 bil as at 31 August 2024 (RM4.75 bil as at 31 August 2023). The Group elicited RM2.4 bil of property and land sales in FY Mar 2024 (FY Mar 2023: RM2.7 bil) while unbilled sales stayed fairly healthy at RM2.3 bil as at end-June 2024 (end-March 2023: RM3.0 bil). 

IJM Corp's core pre-tax profit (excluding unusual items) was 19% higher in fiscal 2024, lifted by the stronger profit showing of its industry, port and toll1