IJM expected to secure K2 data center construction contract in Johor

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IJM Johor data center contract

Highlights

IJM is expected to win a contract worth around RM500 million to build a K2 Strategic Infrastructure Malaysia data center in Johor, with an announcement possible as early as this week.
If finalized, IJM's construction order book is expected to exceed RM11 billion, with new contracts this year reaching RM3.5 billion.
IJM recorded net profit of RM137.4 million on revenue of RM2.29 billion for the first quarter of the financial year ended 30 June 2026, driven by strong performance from its construction division.

This article was translated from the original. Read the original version by our correspondent here.

Contract details and IJM's position

The Edge Malaysia reported that IJM had emerged as the frontrunner for the contract worth around RM500 million for a project owned by K2 Strategic Infrastructure Malaysia Sdn Bhd, a wholly owned subsidiary of the Kuok Group, in Johor. Two sources familiar with the matter said the contract had essentially been finalized, with an announcement potentially coming as early as this week if all goes smoothly.

According to the sources, IJM beat several other companies to secure the work. If the win is announced, IJM's current construction order book is expected to grow to more than RM11 billion, while new contract awards for the current year would reach RM3.5 billion.

The momentum follows a string of new contracts secured by the company recently. Last week, IJM secured a RM1.23 billion contract from AT&S Austria Technologie & Systemtechnik (Malaysia) Sdn Bhd to build a semiconductor manufacturing facility at Kulim Hi-Tech Park, Kedah, after winning more than RM900 million in work for semiconductor and medical technology projects since August 2026.

Impact on the data center sector and group performance

K2, a turnkey provider of hyperscale data center campuses, currently has two existing data centers in Kulai, Johor, with a design capacity of 234MW. In addition to Johor, the company has four data centers in Dublin, Ireland, one in Cikarang, Indonesia, and another in Rayong, Thailand.

According to an earlier report cited in the original text, K2 said it had 114MW of operational capacity, 82MW under construction and around 350MW in the pre-construction phase. The new project in Johor further strengthens the state's position as a major regional data center investment hub.

For the first financial quarter ended 30 June 2026, IJM recorded net profit of RM137.4 million on revenue of RM2.29 billion, compared with net profit of RM95.6 million on revenue of RM1.73 billion in the same period a year earlier. In a note to its financial statements, IJM said the improved performance was driven mainly by its construction division. For the financial year ending 31 March 2027, the group expects the construction division to continue performing strongly, supported by a substantial order book spanning hyperscale data centers, advanced manufacturing, warehouses and road infrastructure.

In our earlier coverage of the approval of 27 data center projects under the data center task force through July 2026, we outlined the concentration of projects in Johor, Selangor and Negeri Sembilan, along with the estimated substantial investment involved. The article also discussed projected high-skilled job creation, the minimum 30% local content requirement and regular monitoring mechanisms to ensure projects are implemented in accordance with the conditions.

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