IOI Corp 2Q Profit Up 9%; Declares Four Cents Dividend
19/02/2020The Edge Markets

KUALA LUMPUR: IOI Corp Bhd’s net profit for the second quarter ended Dec 31, 2019 (2QFY20) rose 9.21% to RM213.5 million, from RM195.5 a year earlier, thanks to higher crude palm oil (CPO) prices.

In a bourse filing, the group said earnings per share (EPS) rose to 3.4 sen from 3.11 sen.

Quarterly revenue increased 3.97% to RM1.96 billion, from RM1.88 billion previously.

IOI declared a dividend of four sen, payable on March 13. This compares with 3.5 sen dividend payout for FY19.

IOI said its plantation segment’s profit stood 49% higher at RM175.3, from RM117.3 million for 2QFY19, due to higher CPO prices, which averaged at RM2,246 a tonne against RM1,932 previously.

Conversely, its resource-based manufacturing segment’s profit fell by 79% to RM29.9 million, from RM139.9 million. However if one were to exclude fair value losses/gains on derivative financial instruments, underlying profit for the segment stood higher at RM122.9 million, from RM121.5 million — as a result of a higher share of associate resulted from Bunge Loders Croklaan Group BV.

This was in turn offset by lower operation contributions from the oleochemical and refining subsegments.

For the first half of the year, IOI’s net profit rose 6.84% to RM362.5 million, from RM339.3 million in the previous corresponding period, translating into a higher EPS of 5.77 sen, from 5.4 sen.

Half-year revenue was marginally lower at RM3.73 billion, from RM3.76 billion previously.

On its prospects, the group said the Covid-19 outbreak and import restrictions on Malaysian refined palm oil in India have been negative factors.

“Going forward, the group expects palm oil price to be volatile due to the uncertainty on the extent and duration of the Covid-19 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 2QFY20 in line with the relatively stronger palm oil price in 3QFY20,” the group said.

Shares in IOI closed unchanged at RM4.50 yesterday, giving the group a market capitalisation of RM28.28 billion.