KUALA LUMPUR: IOI Corp Bhd expects crude palm oil (CPO) price to hover within the range of RM3,700 to RM4,100 per tonne in the next three months.

In a filing with Bursa Malaysia, the plantation group noted that CPO prices experienced volatility in recent months.

“Looking ahead, we expect an increase in CPO production due to seasonal trends. This increase, coupled with the expected good soybean harvest in South America, may pose challenges for CPO prices.

“However, the anticipated replenishment of palm oil stock by importing countries with low inventories will support CPO price," IOI said in a statement.

For the third quarter ended March 31, 2024 (3Q24), IOI's net profit dropped 37.6% year-on-year (y-o-y) to RM123.1mil or earnings per share (EPS) of 1.98 sen as revenue fell 7% y-o-y to RM2.46bil.

For the nine months ended March, the group posted a net profit of RM762.5mil or EPS of 12.29 sen on revenue of RM7.06bil.

On its plantation segment, IOI said fresh fruit bunch (FFB) production is expected to increase in 4Q24 following the seasonal production cycle.

“Coupled with the continuing labour productivity improvement and higher oil extraction rate due to better FFB quality, we expect the plantation segment to perform well in 4Q24,” it said.

IOI anticipates the ongoing low or negative refining margins to persist in its refinery and commodity marketing sub-segment.

It added that the overcapacity of refineries in Indonesia and the raw material price advantage from the country's CPO export duty policy are largely the causes for these low or negative refining margins.

"The performance of our oleo-chemical sub-segment is largely dependent on the global economic and trade growth.

“With ongoing uncertainties surrounding the global economy and geopolitical tensions affecting global trade, we anticipate our oleochemical sub-segments performance will face continued challenges," it said.

It said the US dollar-ringgit exchange rate is expected to experience volatility in 4Q24, driven by ongoing geopolitical tensions and uncertainties surrounding the US Federal Reserve's monetary policy.

“Overall, the group expects its operating and financial performance for 4Q24 to be satisfactory," IOI said.