IOI Corp chalks up improved results for Q2

PETALING JAYA: IOI Corp Bhd’s net profit for the second quarter ended Dec 31 rose 9.2% to RM213.5 million, from RM195.5 million in the previous corresponding quarter due mainly to higher contribution from all segments.

The group’s plantation sector posted a 49% increase in profit to RM175.3 million from RM117.3 million on the back of higher crude palm oil (CPO) price realised, which was RM2,246/metric tonne during the quarter.

The resource-based manufacturing segment profit, however, was RM29.9 million, 79% lower than the RM139.3 million a year ago.

Revenue for the quarter also rose to RM1.96 billion, 3.97% than RM1.9 billion a year ago.

The group declared a first interim single tier dividend of 4 sen per share.

For the cumulative period, IOI Corp saw a 6.8% increase in net profit to RM362.5 million, from RM339.3 million previously. Revenue was marginally lower at RM3.73 billion, from RM3.76 billion.

Looking ahead, the group said overall it anticipates its operating performance for the remaining periods of FY2020 to be satisfactory, amidst a challenging global economic environment.

On palm oil prices, it said volatility is expected due to the uncertainty on the extent and duration of the coronavirus outbreak, but underpinned by low palm oil inventory and expected higher demand before and during Ramadan in April and May 2020.

“The fresh fruit bunch production for our plantation segment is expected to gradually recover from the low seasonal production cycle in the previous quarter. We expect the plantation segment to perform better than Q2 FY20 in line with the relatively stronger palm oil price in Q3 FY20,” It said in its Bursa filing.

As for its resource-based manufacturing segment, IOI Corp said the operating environment will be challenging due to the coronavirus outbreak.

“The higher and more volatile palm oil price has also affected the demand and margin for palm oil products. Nevertheless, we expect the performance of our resourcebased manufacturing segment, which includes our oleochemical business and specialty fats associate company, to be satisfactory,” the group said.