IOI Corp posts RM411mil earnings in 3Q22

KUALA LUMPUR: IOI Corp Bhd’s net profit rose 2.5% to RM411.2mil in the third quarter ended June 30 (3Q22) from RM401.3mil a year ago due to higher contribution from the plantation segment.

The plantation group’s revenue surged 43.3% to RM4.1bil against RM2.86bil last year.

IOI said the plantation segment profit for Q322 of RM518.5mil was 179% higher than the profit for Q321 of RM185.9mil due mainly to higher crude palm oil (CPO) and palm kernel (PK) prices realised as well as higher FFB production and higher share of associate results from Bumitama Agri Ltd (BAL).

“Average CPO and PK prices realised for Q322 were RM5,064 per tonne (Q321 – RM3,211 per tonne) and RM4,588 per tonne (Q3021 – RM2,616 per tonne) respectively,” it said.

Its resource-based manufacturing segment profit for Q322 is RM45.8mil as compared to RM442.2mil for Q321.

IOI said excluding the fair value loss on derivative financial instruments of RM17.4mil and share of Loders’s one-off gain of sales of its refinery of RM267.9mil reported in Q321, the resource-based manufacturing segment reported an underlying profit of RM63.2mil for Q322 was 52% lower than the underlying profit of RM130.9mil for Q321.

“The lower profit was due mainly to a lower share of associate results from Loders and lower sales volume and margins from refining sub-segment which was mitigated by higher contribution from oleochemical sub-segment,” it said.

For the first nine months to March 31, IOI reported a net profit of RM1.18bil, up 14.35% from RM1.03bil a year earlier, while revenue surged 52% to RM11.84bil.

On its prospects, IOI foresees CPO price to remain strong in the near term as well as the severe labour shortage in Malaysia continuing to curb the supply of CPO.

“For our plantation segment, CPO production is expected to increase in Q422 in line with the seasonal trend. With the anticipated strong CPO price, we expect the plantation segment to perform well in Q422,” it said.

IOI also expects the performance of its refinery and commodity marketing sub-segment to be satisfactory due to the positive margins as well as the efficient business model of its refinery in Sabah.

For Q422, IOI expects the performance of the specialty fats sub-segment comprising its associate company Bunge Loders Croklaan (BLC) to be satisfactory as it benefits from favourable demand and BLC’s supply chain capability, although the operating environment presents challenges such as high energy cost and the pandemic-related lockdown in parts of China.

“US dollar has strengthened considerably against ringgit which has resulted in forex translation loss from our USD-denominated borrowings. US Dollar is anticipated to remain strong in the near term due to the aggressive US Federal Funds rate hikes this year.

“Overall, the group expect our financial performance for Q422 to be good on the back of strong performance from the plantation segment and the oleochemical sub-segment,” IOI said.

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IOI Corp , CPO , palm kernel , forex


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