KUALA LUMPUR: Plantation heavyweight IOI Corporation Bhd posted a set of subdued earning for the financial year ended June 30, 2015 as it was impacted by foreign currency translation losses and the slump in crude palm oil (CPO) prices.

It announced on Monday its FY15 earnings were only RM168mil compared with RM3.37bil in FY15. There was a net foreign currency translation loss on foreign currency denominated borrowings of RM735.30mil in FY15.

IOI Corp said profit before interest and tax  fell 24.2% to RM1.460bil compared with RM1.927bil a year ago due mainly to lower contribution from both plantation and resource-based manufacturing segments. 

Its revenue was down by just 2.4% to RM11.62bil compared with a year ago.

“The plantation profit of RM1.00bil for FY2015 is 15% lower than RM1.18bil reported for FY2014. The lower profit for FY2015 is due mainly to lower CPO price realised of which the average CPO price realised for FY2015 was RM2,221 per tonne as compared to RM2,509 for FY2014,” it explained.

IOI Corp said its resource-based manufacturing profit fell 47% to RM420.40mil in FY2015 from  RM787.30mil in FY14. 

“The lower profit is due mainly to unrealised fair value loss in foreign currency forward exchange contracts arising from a weaker Ringgit amounting to RM119mil (FY2014 – gain of RM79.8mil),” it said.

It added the forward exchange contracts were entered into as a hedge to protect the Ringgit denominated margin of the manufacturing business. 

However, when excluding the unrealised fair value loss/gain in foreign currency forward exchange contracts for both FY2015 and FY2014 respectively, the underlying profit for resource-based manufacturing segment of RM539.4mil for FY2015 fell 24% compared with RM707.50mil in FY14. 

IOI Corp said this was mainly due to lower margin from the oleochemicals and the refinery sub-segments as well as lower sales volume from the refinery sub-segment.

For the fourth quarter ended June 30, 2015, its reported earnings fell 60.8% to RM159.70mil from RM407.50mil a year ago as it was impacted by net foreign currency translation losses of RM76.80mil compared with a gain of RM83.90mil a year ago.

Its profit before interest and tax was lower by 19% to RM334.40mil from RM413.20mil a year ago due mainly to lower contribution from plantation segment. 

Earnings per share were 2.52 sen compared with 6.42 sen.

“The plantation profit decreased by 26% to RM235.8mil for Q4 FY15 as compared to RM318.6mil reported for Q4 FY14,” it said. 

It explained the lower profit was due mainly to lower CPO price realised at RM2,197 compared to RM2,661 a  year ago.

As for the resource-based manufacturing profit, the profit fell 4% to RM99.1mil from RM103.7mil mainly due to lower margin from the refinery sub-segment, moderated by better margin from specialty oils and fats sub-segment.

Excluding the net foreign currency translation loss of RM76.8mil (Q4 FY14 – gain of RM83.9mil), the underlying pre-tax profit fell 20% to RM280.1mil from RM349.1mil a year ago due mainly to lower plantation profit as mentioned above.

It rewarded shareholders with a second interim single tier dividend of 45% or 4.5 sen per 10 sen share which will go ex on Sept 8.