KUALA LUMPUR (May 21): IOI Corp Bhd reported a 3% rise in third quarter net profit from a year earlier. This came on higher income from downstream PLANTATION, and property operations, besides currency translation and real estate revaluation gain.

These factors have mitigated the impact of a 11% drop in revenue on lower crude palm oil (CPO) and palm kernel prices, IOI told the exchange today.

IOI said net profit came to RM567.8 million in the quarter ended March 31, 2013 (1QFY13) compared to RM552 million previously. Revenue fell to RM3.2 billion from RM3.58 million.

"The (pre-tax profit) increase is due mainly to better performance from manufacturing and property segments, which is however mitigated by lower translation gain on foreign currency denominated borrowings and lower profit contributions from plantation segment," IOI said.

Cumulative 9MFY13 net profit rose to RM1.7 billion from RM1.39 billion a year earlier. Revenue, however, fell to RM10.16 billion from RM11.89 billion.

During 3QFY13, IOI said upstream plantation profit had fallen 31% despite higher fresh fruit bunch output.

The firm said it had registered an average CPO price of RM2,226 a tonne during the quarter versus RM3,143 a year earlier.

Lower CPO prices had, however, helped IOI's downstream plantation operation's profit rise to RM226.1 million from RM89.1 million.

"In the resource-based manufacturing segment, the group’s oleochemical business continues to perform well due to relatively low feed stock prices.

"The refinery and specialty fats businesses will also perform satisfactorily due to better competitive position as a result of the export duty structure in Malaysia," IOI said.

IOI said with the anticipated recovery in palm oil prices due to lower inventory and resilient demand, the upstream segment is expected to perform better going forward. This comes amid manpower shortage and costlier labour, the firm said.