PETALING JAYA: After a severe bottomline contraction in the third quarter, IOI Corp Bhd’s net profit in the final three months of its financial year 2020 leaped by over five times on stronger revenue and a much lower net translation loss on foreign currency-denominated borrowings.

The group said in a Bursa Malaysia stock filing that its net profit in the April-June 2020 period rose to RM238.3mil as compared to RM46.6mil a year earlier. This was mainly due to the higher contribution from its plantation segment.

According to IOI Corp, the plantation segment’s profit for the fourth quarter was RM234.2mil, which was 177% higher on a year-on-year (y-o-y) basis due to higher crude palm oil (CPO) and palm kernel prices realised as well as higher fresh fruit bunches production.

Meanwhile, the group’s resource-based manufacturing segment profit for the fourth quarter was RM99.6mil or 13% higher than the profit a year earlier.

IOI Corp’s revenue for the fourth quarter ended June 30 increased by 17.22% year-on-year (y-o-y) to RM2.04bil. Earnings per share were 3.8 sen. The group declared a dividend of four sen per share for the fourth quarter.

For the full financial year of 2020 (FY20), IOI Corp’s net profit fell by 4.88% y-o-y to RM600.9mil.

However, revenue rose by 5.64% y-o-y to RM7.8bil.

IOI Corp said that the higher contribution from the plantation segment in the financial year was partially offset by lower operational contributions from the resource-based manufacturing segment.

The higher profit reported by the plantation segment was due mainly to higher CPO price realised as well as improved CPO extraction rate.

On the other hand, the lower profit of the resource-based manufacturing segment was because of lower operational contributions from the oleochemical and refining sub-segments with reduction in margins.

“The share of associates result is also lower due to lower sales arising from the Covid-19 pandemic as well as a one-off debt write down in the European operation, ” it said.

Moving forward into FY21, IOI Corp expects to sustain its operational and financial performance

“Oil palm crop production for the group is expected to be flat or slightly lower in FY21 due to the aggressive replanting program carried out in Sabah, offsetted by the increased crop production from our young Indonesian plantings and our associate company, Bumitama Agri Ltd

“Overall, the financial performance of our plantation segment in FY21 is likely to be similar to that in FY20, which was a significant improvement from FY19.

“In our resource-based manufacturing segment, the prospect of the oleochemical sub-segment remains positive despite the operational challenges posed by Covid-19 pandemic as the oleochemical products have a wide range of applications in different industries, ” it said.