IOI Corp reports lower Q1 net profit on forex translation loss

IOI has also taken a number of steps to improve sustainability practices, including obtaining third-party verification on its progress towards implementing sustainable policies.

KUALA LUMPUR: IOI Corporation Bhd's net profit fell to RM143.8 million for the first quarter ended Sept 30, 2018 (Q1) from RM360 million in the same period a year ago.

Revenue, however, was higher at RM1.88 billion from RM1.87 billion previously.

In a filing to Bursa Malaysia, the company attributed the weaker profit to lower operating profit and total net foreign currency translation loss on foreign currency denominated borrowings and deposits.

It said the plantation segment's profit was 51 per cent lower year-on-year at RM149.5 million during the quarter under review, due to lower fresh fruit bunches production and lower crude palm oil (CPO) price realised.

The resource-based manufacturing segment, on the other hand, registered a higher profit of RM129.2 million in the first quarter of the 2019 financial year (FY19) from RM106.6 million in the same period in FY18.

Moving forward, IOI Corp expects the plantation segment's financial performance in the second quarter to be lower than the first quarter given the lower palm oil price.

For the resource-based manufacturing segment, the company expects the oleochemical sub-segment to continue to perform well in the next quarter, with the low palm kernel price and steady demand for fatty acids and fatty esters.

The refining sub-segment is expected to perform better in the next quarter due to improvement in refining and fractionation margins.

“Overall, the group expects its financial performance for the next quarter to be satisfactory, albeit slightly lower than the previous quarter, due to the lower CPO price,” it said. - Bernama