IOI Corp’s Q2 net profit surges on forex gains, proposes 4.5 sen dividend

PETALING JAYA: IOI Corp Bhd’s net profit jumped 38-fold to RM595.9 million for the second quarter ended Dec 31, 2017 from RM15.6 million a year ago, due to significant forex translation gains amounting to RM196.4 million as opposed to forex losses of RM330 million in the preceding year’s corresponding quarter. The group’s revenue fell 4.3% to RM2.4 billion in the quarter under review from RM2.51 billion in the quarter ended Dec 31, 2016.

IOI Corp has proposed an interim dividend of 4.5 sen per share.

The integrated palm oil player with diversified business interest including property development and resource based manufacturing, expects a positive results from its plantation segment for the next three months, on the back of resilient crude palm oil prices and the continued recovery in fresh fruit bunch (FFB) production.

With the strengthening of the ringgit, the group is also looking at substantial forex translation gains from its US dollar-denominated borrowings.

“As for the resource-based manufacturing segment, both the oleochemical and specialty fats subsegments are expected to perform well during the next six months as the global and regional economies continue their steady growth,” said its board of directors.

IOI Corp also plans to divest its 70% equity interest in its specialty fats business, expected to be completed in the third quarter of FY18.

As for the first two quarters of the financial year, its net profit surged almost eight times to RM955.9 million from RM120.4 million in the same period last year, largely due to gains on its foreign currency-denominated borrowings and fair value gain on derivative financial instruments in the resource-based manufacturing segment. Revenue for the six months declined 4.8% from RM4.8 billion to RM4.6 billion.

On Bursa Malaysia last Friday, IOI Corp gained 1 sen to RM4.79 on volume of 7.1 million shares.