IOI Corp Expects Plantation Segment to Drive FY22 Growth
24/08/2021The Star

(File pic by IOI Corporation).

KUALA LUMPUR: Higher palm oil prices boosted IOI Corp Bhd's earnings in the last quarter ended June 30 (Q4FY21) and the company expects a challenging operating environment to support the current price trend.

"With the anticipated strong crude palm oil (CPO) price during the first half of FY22, we expect the plantation segment to continue to perform well in the new financial year," IOI Corp said in a filing today.

The planter posted a net profit of RM359mil on revenue of RM3.46bil in the final quarter to lift its full-year earnings to RM1.39bil on sales of RM11.25bil.

It has declared a second interim dividend of 6 sen a share. The group's plantation segment reported a profit of RM410mil in the final quarter, or 75% higher from RM234mil made a year ago. This was achieved mainly due to a higher average CPO price of RM3,648 a tonne (Q4FY20: RM2,370) and palm kernel price at RM2,656 a tonne (Q4FY20; RM1,349). The gains were offset by lower fresh fruit bunch (FFB) production.

CPO prices remained high in August, hovering between RM4,300 and RM4,500 a tonne, supported by supply concerns.

Stockpile in the country was also low at 1.5 million tonnes as at end of July due to lower FFB output.

IOI Corp expects the group's FFB production to be stable in FY22, as higher production in Indonesia would offset output losses from its estates in Sabah due to the accelerated replanting programme.

Meanwhile, IOI Corp expects the manufacturing division to post satisfactory results in FY22.

Volatile CPO prices have an impact on refining profitability, while its oleochemical business would see thinner margins due to higher feedstock prices.

The group expects overall financial performance in the new financial year to be better than the previous year, underpinned by the strong performance from our plantation segment," IOI Corp said.