PETALING JAYA (Nov 19, 2013): IOI Corp Bhd's net profit halved to RM301.8 million for the first quarter ended Sept 30, 2013 (Q1FY14) from RM604.3 million a year ago, due mainly to translation loss of RM164.1 million on foreign currency denominated borrowings and lower profit from its plantation segment during Q1 FY2014.

"Excluding the translation difference on foreign currency denominated borrowings, the underlying profit of the group for Q1FY14 was 33% higher than Q1FY13," said the group in a filing with Bursa Malaysia yesterday.

IOI Corp said its plantation profit decreased by 36% to RM256.1 million in the July-September 2013 period compared with RM401.2 million for Q1FY13, due mainly to lower crude palm oil (CPO) and palm kernel prices as well as marginally lower fresh fruit bunch production.

Average CPO price realised for Q1FY14 was RM2,347 per tonne from RM2,941 per tonne a year ago.

Nevertheless, revenue for Q1FY14 rose 3% to RM3.24 billion from RM3.13 billion a year ago.

Going forward, IOI Corp expects CPO prices to remain at the prevailing level for the next few months.

"We also expect higher contribution from our associate in Indonesia, Bumitama Agri Ltd as more of their young palm trees will reach peak production years. Overall, the group's plantation division is expected to perform satisfactorily in the remaining quarters," it added.

IOI Corp said its first foray development in Xiamen, China, has been a success and is expected to contribute favourably to the property segment result going forward.

"As for the domestic property scene, despite the increase in real property gain tax rates as announced recently in Budget 2014, our property division is expected to perform well given that the mass market segment where the group has significant presence will continue to be resilient.

"Overall, the group's performance for the remaining quarters is expected to be satisfactory," it said.