KUALA LUMPUR: IOI Corporation Bhd
expects a strong financial performance in the financial year ending June 30, 2027 (FY27), primarily driven by its plantation segment as crude palm oil (CPO) prices remain elevated amid concerns over El Niño and tight global vegetable oil supplies.
The plantation group said CPO prices have risen significantly to between RM4,800 and RM5,000 per tonne since mid-August, and expects the strong price environment to persist well into FY27.
It attributed the outlook to concerns over the severity of El Niño affecting oil palm-growing areas in Malaysia and Indonesia, with fresh fruit bunch (FFB) production expected to continue feeling the lagged effects of drought.
Favourable biodiesel economics, supported by elevated crude oil prices and constrained crude oil supplies due to the Middle East conflicts, are also expected to underpin CPO prices.
“With our positive outlook for CPO price, we expect our plantation segment to deliver good financial performance in FY27,” IOI Corp said.
FFB production is projected to increase by a single-digit percentage as the group enters the final year of its seven-year aggressive replanting programme in Sabah, despite the impact of El Niño.
However, the group expects conditions elsewhere in its downstream businesses to remain challenging.
“The outlook for our refinery and commodity marketing sub-segment continues to be challenging amid intense competition from the Indonesian refineries.
“We will continue to leverage our expertise in producing low- contaminant and sustainability-compliant oils to add value to our product portfolio and support the performance of this sub-segment,” IOI Corp said.
“For FY27, our oleochemical sub-segment is expected to operate in a challenging environment due to intense competition from Indonesian producers and the U.S. tariffs, although we see gradual improvement in demand since the second half of FY26,” it added.
Nevertheless, IOI Corp said it has seen a gradual improvement in oleochemical demand since the second half of FY26 and will focus on product differentiation, innovation and operational efficiency.
Its specialty fats associate, Bunge Loders Croklaan, is expected to deliver mixed results. The North American operations are anticipated to perform well following the expansion of its New Orleans plant, while Asian operations could be affected by moderating cocoa butter equivalent margins.
“Overall, the group expects its operating and financial performance for FY27 to be good, primarily due to the strong results from the plantation segment,” it said.
For the fourth quarter ended June 30, 2026, IOI Corp’s net profit rose 14.7% to RM500.8mil from RM436.5mil a year earlier.
Revenue increased 2.8% to RM3.04bil from RM2.96bil previously, while earnings per share improved to 7.97 sen from 7.04 sen.
For FY26, net profit climbed 10.6% to RM1.68bil from RM1.52bil, while revenue grew 3.9% to RM11.78bil from RM11.33bil.
The board declared a second interim dividend of seven sen per share, up from 5.5 sen a year earlier, payable on Sept 25.
This brings its total dividend for FY26 to 12.5 sen per share, compared with 10.5 sen in FY25.
