KUALA LUMPUR: IOI Corp Bhd posted a lower underlying profit of RM268.9 million for its first financial quarter ended Sept 30, 2014 (1QFY15), 24% lower from RM352.1 million a year ago, due mostly to lower contribution from its resource-based manufacturing segment. In its results announcement yesterday, IOI Corp said its resource-based manufacturing profit stood at RM108.8 million, 50% lower than RM218.6 million posted in 1QFY14.

“The lower manufacturing profit is mainly due to lower margin and sales volume from oleochemicals and refinery sub-segments,” it said.

Revenue for 1QFY15 was 6.76% lower at RM3.02 billion from RM3.24 billion in the previous corresponding quarter.

IOI Corp’s net profit fell to RM176.7 million in 1QFY15, 41.5% lower than RM301.8 million in the previous corresponding quarter as property contribution ceased after the listing of IOI Properties Group Bhd. Profit contribution from its property division in 1QFY14 was RM119.7 million, which was equivalent to nearly 40% of the group’s total profit.

Nonetheless, plantation profit expanded 12% to RM281 million from RM250.1 million in the previous corresponding quarter due mainly to higher fresh fruit bunch (FFB) production and palm kernel prices realised.

FFB production for 1QFY15 was about 10% higher at 967,202 million tonnes.

“We expect crude palm oil price to remain at the prevailing level before trending higher towards the beginning of next year when palm oil production enters its seasonal lows,” it said, adding that it expects higher contribution from its Indonesian plantation subsidiary going forward. “Overall, the group’s performance for FY15 is expected to be satisfactory,” IOI Corp said.

IOI Corp’s share price dropped 0.42% or two sen to RM4.70 yesterday, giving it a market capitalisation of RM29.8 billion.

This article first appeared in The Edge Financial Daily, on November 18, 2014.