KUALA LUMPUR: IOI Corp Bhd posted a net loss of RM188 million or a loss per share of 2.95 sen in the third quarter ended March (3QFY15) from a net profit of RM2.18 billion or earnings per share (EPS) of 34.2 sen a year ago, mainly due to a net repayment of US$526 million (RM1.87 billion) on its US dollar-denominated borrowings and higher net foreign currency translation loss.

Revenue for the quarter under review declined 4.25% to RM2.78 billion, from RM2.9 billion a year earlier, its filing with Bursa Malaysia yesterday showed.

IOI Corp (fundamental: 1.7; valuation: 2.1) said the group’s lower profit was also due to lower contributions from both the plantation and resource-based manufacturing segments.

Lower earnings from the plantation business were due to lower fresh fruit bunch (FFB) production and a lower crude palm oil (CPO) price. Lower profit from the resource-based manufacturing business was due to lower margin and sales volume.

IOI Corp said the net repayment of US$526 million during the quarter will result in lower impact of dollar-ringgit volatility on its US dollar-denominated borrowings in the future.

For the nine months ended March (9MFY15), IOI Corp posted a net profit of RM8.2 million, down 99.72% from RM2.97 billion in 9MFY14. Consequently, EPS for 9MFY15 was 0.13 sen, compared with 46.48 sen in 9MFY14.

Revenue also slipped 4.41% to RM8.68 billion from RM9.08 billion in 9MFY14.

The net foreign currency translation loss on its foreign currency-denominated borrowings for 9MFY15 amounted to RM658.5 million, according IOI Corp’s filing with Bursa.

On short-term prospects, IOI Corp said it expects the CPO price to hover between RM2,050 and RM2,250 per tonne for the next three months.

“Going forward, we expect higher contribution from our associate in Indonesia, Bumitama Agri Ltd, as more of its palm trees enter prime age, and also higher FFB production from our Malaysian plantations as the palm trees enter into the seasonal higher production period,” it said.

For the resource-based manufacturing segment, the group expects its speciality oils and fats and oleochemical sub-segments to perform satisfactorily, given the resilient demand from both the food and oleochemical sectors, and the recent commissioning of its new fatty ester plant to cater for the food and pharmaceutical sectors.

“Overall, we expect the group’s underlying performance for the remaining final quarter to be satisfactory,” it said.

IOI Corp closed nine sen or 2.09% lower at RM4.21 yesterday, giving it a market capitalisation of RM26.7 billion.

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This article first appeared in The Edge Financial Daily, on May 15, 2015.