Friday 29 Mar 2024
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KUALA LUMPUR (Nov 17): Plantation group IOI Corp Bhd's net profit for its first quarter ended Sept 30, 2017 (1QFY18) jumped 3.4 times to RM360 million from RM104.8 million in the same quarter last year.

The improvement is mainly due to net foreign currency translation gain on foreign currency denominated borrowings and lower fair value loss on derivative financial instruments from its resource-based manufacturing segment, the company told Bursa Malaysia in a filing today.

This was despite a 5.3% year-on-year decline in quarterly revenue to RM2.21 billion from RM2.33 billion. Also partly offsetting the quarter's profit gains was lower fair value gain on biological assets in its plantation segment, the group said.

Profit before tax (PBT) for the quarter came in at RM450.1 million versus RM136 million a year ago. The quarter booked a net foreign currency translation gain of RM68.6 million (1QFY17 — loss of RM172 million), a fair value loss on derivative financial instruments from the resource-based manufacturing segment of RM21.5 million (1QFY17 — loss of RM46.6 million), and fair value gain on biological assets of RM1 million (1QFY17 — gain of RM35.4 million).

Excluding these, the group's underlying PBT for 1QFY18 would be RM402 million, up 26% from the underlying PBT of RM319.2 million in 1QFY17, due mainly to higher contribution from the resource-based manufacturing segment.

Going forward, IOI Corp said it expected its plantation segment to perform satisfactorily as its fresh fruit bunches production had recovered and the prices of crude palm oil and palm kernel remained high.

Its oleochemical sub-segment is also expected to perform well due to steady global economic growth, while its oil and fats sub-segment is expected to benefit from higher business volume from multinational customers and the impending trans-fat ban in the US come mid-2018.

Further, it said the US dollar-ringgit exchange rate which affects the foreign exchange translation gain/loss arising from its medium to long dated US dollar-denominated borrowings has become less volatile recently, due to positive macroeconomic factors locally.

"Overall, the group expects its operating performance for FY2018 to be satisfactory," it added.

Shares in IOI Corp closed unchanged at RM4.44 today, leaving the group with a market capitalisation of RM27.9 billion.

 

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