IOI Corp said its performance in the third quarter was dragged down by lower contribution from its plantation segment, mitigated by higher contribution from its resourced-based manufacturing segment.
PETALING JAYA: IOI Corp Bhd
expects the US dollar/ringgit exchange rate to remain volatile for the next three months.
In a filing with Bursa Malaysia, the group noted that the ringgit had strengthened to the 4.60 level to the US dollar this month.
“Overall, we expect the operating environment to be challenging,” it said, adding that it anticipates its financial performance to be flat with downside bias during the fourth quarter of its current fiscal year.
For its third quarter ended March 31, 2023 (3Q23), IOI Corp’s net profit stood at RM197.4mil compared with RM411.2mil in the previous corresponding period, while revenue was lower at RM2.66bil compared with RM4.10bil a year earlier.
Basic earnings per share stood at 3.18 sen versus 6.62 sen previously.
IOI Corp said its performance during the quarter was due mainly to lower contribution from its plantation segment, mitigated by higher contribution from its resourced-based manufacturing segment.
For the nine-month period ended March 31, 2023, IOI Corp’s net profit stood at RM1.08bil against RM1.18bil in the previous corresponding period, while revenue dipped to RM9.63bil against RM11.84bil a year earlier.
IOI Corp said crude palm oil (CPO) spot price dropped significantly this month to around RM3,500 to RM3,700, due to the expected seasonal increase in palm fruits production as well as the larger than expected soybean harvest.
It added that the Malaysian palm oil stock declined further at the end April to its lowest in 13 months.
“During the next three months, CPO price is expected to stay around this level, before the looming El Nino phenomenon affects palm fruit production probably in the fourth quarter of this year.
“For our plantation segment, we expect palm fruit production to increase in line with the seasonal trend but this positive factor will be offset by lower CPO prices.”
As for its refinery and commodity marketing sub-segment, IOI Corp said refining and fractionation margins have been squeezed at a negative level.
It said this was due to the high CPO export duty in Indonesia, as well as the near price parity of palm oil against soyabean oil in major destination markets.
“The performance of our oleochemical sub-segment is largely dependent on the global economic and trade growth.”
With the downbeat economic outlook in the United States and most European countries and geopolitical tensions between the United States and China, coupled with the substantial spike in Malaysia’s electricity cost for large manufacturers, IOI Corp said its oleochemical sub-segment’s performance is expected to decline in the fourth quarter of the current financial year.
This is despite moderate raw material prices and China’s economy growing healthily this year, according to the group.
