KUALA LUMPUR: IOI Corporation Bhd net profit for the third quarter ended March 31, 2009 fell sharply to RM37.36 million from RM601.64 million a year ago mainly due to unrealised translation loss on US dollar denominated borrowings and lower earnings from its plantation division.
The company posted revenue RM3.1 billion in 3Q compared to RM3.55 billion a year ago. Earnings per share fell to 0.63 sen from 9.89 sen previously.
IOI Corp declared a second interim dividend of three sen, to be payable on June 26 this year.
The just ended 3Q earnings were also sharply lower than the preceding quarter ended Dec 31, 2008 when it reported net profit of RM182.53 million.
For the nine-month period, IOI Corp said pre-tax profit fell 58% to RM937.4 million from the previous corresponding period of RM2.24 billion a year ago was in tandem with the global economic slowdown.
The group said the lower profit is due mainly to unrealised translation losses on long term US dollar denominated borrowings as well as lower contribution from both the manufacturing and property segments.
"After excluding the unrealised translation loss on long term US dollar denominated borrowings of RM482 million, the pre-tax profit for Q3 year-to-date (YTD) FY2009 is RM1.42 billion or 30% lower than 3Q YTD FY2008, which is reasonable in light of the challenging economic conditions."
"The ringgit has been strengthening against the US dollar since March 31, 2009 and should this trend continues, it is likely that part of the unrealised translation loss on long term US dollar denominated borrowings will be written back," it said.
For the nine months ended March 31, IOI Corp said its plantation segment reported a 6% increase in operating profit to RM1.38 billion from RM1.3 billion last year.
It said the better performance was due mainly to higher crude palm oil (CPO) prices realised from the forward sales entered into during the second half of FY2008, adding that average CPO prices realised for 3Q YTD FY2009 was RM2,932 per tonne compared to RM2,705 last year.
It said the resource-based manufacturing operating profit of RM169.1 million for Q3 YTD FY2009 was significantly lower from RM457.4 million a year ago.
IOI Corp said the lower profit was attributable mainly to realised forex losses and customer defaults on high priced contracts incurred during the first half of the financial year and lower sales volume due to the unfavourable global economic conditions.
Meanwhile, its property segment's operating profit of RM200.5 million for 3Q YTD FY2009 was 35% lower than a year ago as a result of the soft property market conditions and lower margins.
IOI Corp said the global economic slowdown, which is now affecting Malaysia, will no doubt make the current year a challenging period for business corporations.