PETALING JAYA: IOI Corp Bhd
is expected to deliver good financial performance in its financial year ending June 30, 2027 (FY27), underpinned by resilient crude palm oil (CPO) prices and improved fresh fruit bunch (FFB) production.
Its plantation segment is likely to remain the key earnings driver, although its downstream businesses will continue to face stiff competition and tariff-related challenges.
Group managing director and chief executive Datuk Lee Yeow Chor said CPO prices had risen significantly to RM4,800 to RM5,100 per tonne since mid-August, amid concerns over the severity of the El Nino weather phenomenon affecting oil palm areas in Indonesia and Malaysia.
“This strong price level is anticipated to continue throughout FY27, as FFB production will continue to be affected by the follow-on effects of the drought period and as the favourable biodiesel economics continue to be supported by the elevated crude oil prices due to the conflicts in the Middle East,” he said in the group’s recently released FY26 annual report.
For its plantation segment, FFB production is projected to increase moderately by a single-digit percentage as IOI Corp enters the final year of its seven-year aggressive replanting programme in Sabah.
“With our positive outlook for the CPO price, we expect our plantation segment to deliver good financial performance in FY27,” Lee said.
However, the group’s refinery and commodity marketing sub-segment is expected to remain challenging because of intense competition from Indonesian refineries.
IOI Corp plans to leverage its expertise in producing low-contaminant and sustainability-compliant oils to add value to its product portfolio.
Its oleochemical sub-segment is also expected to operate in a difficult environment due to competition from Indonesian producers and United States tariffs, although demand has gradually improved since the second half of FY26.
“To navigate these challenges, we will continue to focus on product differentiation, innovation and operational efficiency,” Lee said, adding that closer collaboration between its Malaysian and German operations, including a joint personal care product formulation centre in Prai, Penang, should strengthen its technical capabilities and support growth in higher-value products.
For its specialty food ingredients business, represented by associate Bunge Loders Croklaan Group BV, performance is expected to be mixed, with stronger prospects in North America offset by weaker Asian performance from lower cocoa butter equivalent margins.
Lee said the group expected its overall operating and financial performance for FY27 to be good, “primarily due to the strong results from the plantation segment”. IOI Corp’s net profit rose to RM1.68bil in FY26 from RM1.52bil a year earlier, while revenue increased to RM11.78bil from RM11.33bil.
In the annual report, Lee noted that FY26 marked the second year of the group’s five-year strategic roadmap (2025 to 2029).
“I am encouraged by the steady development achieved across the four strategic priorities despite a dynamic and challenging global operating environment.”
He added that IOI would diversify into the coconut business and higher-value personal care and pharmaceutical products supporting portfolio expansion.
