KUALA LUMPUR: IOI Corporation Bhd’s earnings slumped 41.4% to RM176.70mil in the first quarter ended Sept 30, 2014 from the RM307.70mil a year ago following the demerger of its properties business and lower contribution from its resource-based manufacturing segment.

The plantation heavyweight said on Monday its revenue fell 6.7% to RM3.02bil from RM3.24bil. Earnings per share were 2.78 sen compared with 4.72 sen.

Elaborating on its results, it said the lower earnings were due mainly to the cessation of profit contribution from the property related business in the just-ended quarter following the demerger (Q1, FY2014 – RM119.7mil).

However, IOI Corp said the decline was moderated by lower translation loss on foreign currency denominated borrowings.

“Excluding the effect from the demerger and translation difference on foreign currency denominated borrowings for both Q1 FY2015 and Q1 FY2014, the underlying profit of RM268.9mil for Q1 FY2015 is 24% lower than the underlying profit of RM352.1mil for Q1 FY2014.

“This is mainly due to lower contribution from resource-based manufacturing segment, mitigated by higher contribution from plantation segment,” it said.

IOI Corp said the plantation profit increased by 12% to RM281mil for Q1 FY2015, as compared to RM250.1mil a year ago. The higher profit is due mainly to higher fresh fruit bunches (FFB) production as well as higher palm kernel prices realised.

“FFB production for Q1 FY2015 was 967,202 tonnes as compared to 875,835 tonnes for Q1 FY2014, that is an increase of about 10%,” it said.

However, IOI Corp’s resource-based manufacturing profit of RM108.8mil for Q1 FY2015 was 50% lower than RM218.6mil a year ago mainly due to lower margin as well as lower sales volume from oleochemicals and refinery sub-segments.

When compared with the preceding quarter ended June 30, 2014 (Q4 FY2014), the profit of RM180.6mil was 55% lower than the RM402.7mil. The lower profit is due mainly to the translation loss of RM88.3mil on foreign currency denominated borrowings recorded in Q1 FY2015 as compared to a gain of RM101.3mil in Q4 FY2014, coupled with the absence of RM52.4mil one-off gain arising from the demerger of the property business recognised in the preceding quarter.

“Excluding the translation difference on foreign currency denominated borrowings for both the Q1 FY2015 and Q4 FY2014 and the effect from demerger, the underlying profit of RM268.9mil for Q1 FY2015 is 8% higher than the underlying profit of RM249.0mil for Q4 FY2014,” it said.

The main reasons were due to a fair value gain on unallocated derivative financial instruments of RM36.1mil in Q1 FY2015 as opposed to fair value loss of RM17.4mil in Q4 FY2014.

This was offset by lower profit from plantation segment with lower CPO and PK prices, mitigated by a 16% increase in FFB production. Average CPO price realised for Q1 FY2015 was RM2,258 a tonne as compared to RM2,661 a tonne for Q4 FY2014.