KUALA LUMPUR: Plantation heavyweight IOI Corporation Bhd
posted net losses of RM59mil in the fourth quarter ended June 30, 2016 weighed down by lower contribution from its resource-based manufacturing and foreign currency translation losses.
It said on Tuesday this was in contrast with the net profit of the RM112.70mil a year ago. Revenue fell 3.9% to RM2.82bil from RM2.93bil a year ago. Loss per share was 0.94 sen compared with 1.78 sen a year ago.
IOI Corp also said it suffered a loss before taxation of RM24.5mil compared with profit before taxation (PBT) of RM169.1mil a year ago.
“The lower PBT is due mainly to lower contribution from resource-based manufacturing segment as a result of fair value loss on derivative financial instruments and higher net foreign currency translation loss on foreign currency denominated borrowings.
“Excluding the net foreign currency translation loss of RM124.7mil (Q4, FY2015: RM76.8mil) on foreign currency denominated borrowings, the underlying PBT of RM100.2mil for Q4 FY2016 is 59% lower than the underlying PBT of RM245.9mil for Q4, FY2015.
IOI Corp said plantation profit slipped 3% to RM195.1mil in Q4, FY2016 versus RM201.6mil a year ago, due mainly to lower gfresh fruit bunches (FFB) production which was offset by higher crude palm oil (CPO) and palm kernel (PK) prices realised.
Average CPO and PK prices realised for Q4, FY2016 were RM2,490 a tonne and RM2,325 a tonne as compared to RM2,197 and RM1,574 a year ago.
IOI Corp's resource-based manufacturing posted a loss of RM58.5mil for Q4 FY2016 versus profit of RM99.1mil a year ago.
“The loss is due mainly to fair value loss on derivative financial instruments of RM121.9mil (Q4, FY2015: gain of RM24.5mil),” it said. It explained that excluding the fair value loss/gain on derivative financial instruments which are primarily trade-related foreign exchange forward contracts, the underlying profit for resource-based manufacturing of RM63.4mil fell 15% from the RM74.6mil a year ago.
It said this was mainly due to lower margin derived from oleochemicals sub-segment following high palm kernel raw material cost. It was also impacted by lower contribution from specialty oils and fats sub-segment arising from RSPO certification suspension.
For FY2016, IOI Corp's earnings surged to RM629.70mil from RM51.90mil a year ago, while PBT was RM965.8mil as compared to RM316.4mil a year ago.
“The higher PBT is due mainly to lower net foreign currency translation loss on foreign currency denominated borrowings and higher contribution from resource-based manufacturing segment.
“Excluding the net foreign currency translation loss of RM318.5 million (FY2015: RM735.3mil) on foreign currency denominated borrowings, the underlying PBT of RM1.284bil for FY2016 is 22% higher than the underlying PBT of RM1.052bil for FY2015,” it said.
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