KUALA LUMPUR (Feb 23): IOI Corp Bhd's net profit in its second quarter ended Dec 31, 2017 (2QFY18) skyrocketed over 37 times to RM595.9 million from RM15.6 million previously, thanks to fair value gain on derivative financial instruments and foreign exchange (forex) gains on foreign currency-denominated borrowings.

Quarterly earnings per share rose to 9.48 sen, from 0.25 sen in 2QFY17, according to a filing by the company today.

The group declared an interim dividend of 4.5 sen per share, with an ex-date of March 16 this year, and payable on March 30.

Excluding the fair value gain and forex gains, IOI Corp said its underlying profit before tax actually declined 16% to RM360.4 million from RM429 million the year before, no thanks to lower contribution from both its plantation and resource-based manufacturing segments.

Revenue fell 4.26% to RM2.4 billion in 2QFY18, from RM2.51 billion a year ago.

In the first half of FY18 (1HFY18), the group's net profit jumped more than seven times to RM955.9 million or 15.21 sen per share, from RM120.4 million or 1.92 sen per share in previous corresponding period, despite revenue falling 4.78% to RM4.61 billion, from RM4.84 billion over the same period.

IOI Corp said with the resilient crude palm oil price and the continued recovery of fresh fruit bunches production from the low production in the previous financial year, it expects the performance of the plantation segment to be positive during the next three months.

"As for the resource-based manufacturing segment, both the oleochemical and specialty fats sub-segments are expected to perform well during the next six months as the global and regional economies continue their steady growth," it said.

IOI Corp said its divestment of the 70% equity interest in Loders Croklaan Group BV, a specialty fats business, is expected to be completed in the third quarter of FY18.

"The reduction of earnings arising from this divestment will be partly offset by the savings in interest expense from the reduction in borrowings and interest income from the balance of divestment proceeds pending new investment opportunity," it said.

IOI Corp said the ringgit-US dollar exchange rate, which has strengthened considerably in the recent months, has resulted in substantial forex translation gain from the group's US dollar-denominated borrowings.

"The outlook for ringgit remains positive during the next three months which would reduce the risk of foreign exchange translation loss from these borrowings," it projected, adding that overall, the group is expected to continue to deliver satisfactory performance in FY18.

At the market break, the counter was trading unchanged at RM4.78, giving it a market capitalisation of RM30.04 billion.