Thursday 28 Mar 2024
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KUALA LUMPUR (Nov 18): IOI Corp Bhd posted a first quarter net profit of RM104.8 million from a net loss of RM744.4 million a year earlier on higher income from its upstream and downstream oil palm operations.

In a statement to Bursa Malaysia today, IOI Corp said significantly lower foreign exchange (forex) loss on its foreign currency-based borrowings also supported profit in the first quarter ended Sept 30, 2016 (1QFY17).

IOI Corp said 1QFY17 revenue rose to RM3.29 billion from RM3.09 billion. IOI Corp's income statement showed net forex loss on foreign currency-denominated borrowings stood at RM172 million against RM853.9 million a year earlier.

"For 1QFY17, the group reported a profit before taxation (PBT) of RM189.2 million as compared to the loss before taxation of RM690.6 million reported for 1QFY16. The higher PBT is due mainly to higher contribution from all segments and lower net foreign currency translation loss on foreign currency denominated borrowings.

"The (upstream) plantation profit increased by 57% to RM346.6 million for 1QFY17 as compared to RM221.4 million reported for 1QFY16. The higher profit reported is due mainly to higher CPO (crude palm oil) and PK (palm kernel) prices realised despite lower FFB (fresh fruit bunch) production," IOI Corp said.

Looking ahead, IOI Corp said its plantation segment was expected to be supported by prevailing high CPO and PK prices despite low FFB yield.

IOI Corp, which has US dollar-denominated loans, is also mindful of the impact of forex volatility to its financials.

"The volatility of Dollar Ringgit exchange rate will continue to affect the non-cash flow foreign exchange (forex) translation gain/loss arising mainly from our medium to long dated US Dollar-denominated borrowings, as well as the fair value gain/loss on derivative financial instruments which are primarily trade related forex forward contracts.

"The group has refinanced/swapped some of its US Dollar loans into Euro-denominated loans to diversify its forex risks and reduce its borrowings cost.

"Overall, the group expects its operating performance for FY17 to be satisfactory," IOI Corp said.

At 12:30pm today, IOI Corp's shares fell one sen or 0.2% to RM4.37 for a market capitalisation of RM27.49 billion. The stock saw some two million shares traded.

 

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