Derivative losses drag down IOI Corp Q2 earnings

PETALING JAYA: Losses from derivative financial instruments were the main factor in the decline of IOI Corp Bhd’s net profit for the second quarter period ended Dec 31, 2016 despite the group recording an improvement in crude palm oil (CPO) sales over the period, say analysts.

According to CIMB Research in a note yesterday, the derivative losses posted by IOI’s resource-based manufacturing division amounting to RM23.4mil more than offset the improvement in plantation earnings due to higher CPO prices and better profit margins from its refining operations.