IOI group of companies post strong FY17 numbers

By IZZAT RATNA

The IOI Group had a good 2017 financial year with full-year earnings rising at IOI Corp Bhd and IOI Properties Group Bhd on an improvedoperating environment.

IOI Corp, posted an 18% year-on-year (YoY) jump in net profit to RM743 million for the financial year ended June 30, 2017 (FY17), on higher contribution from its upstream plantation segment offset by lower contribution from the resource-based manufacturing division.

The integrated edible oil group’s revenue saw a 20% YoY jump in revenue to RM14 billion in FY17.

For the fourth-quarter ended June 30 (4Q17), it posted a net profit of RM317.5 million compared to a net loss of RM59 million in 4Q16, due to foreign currency translation gains on foreign currency-denominated borrowings and lower fair value loss on derivative financial instruments from the resource-based manufacturing segment.

Revenue for 4Q17 rose 31% YoY to RM3.6 billion, and with fresh fruit bunch production expected to increase as more young palm trees reach prime production age, IOI Corp noted in its filing yesterday.

IOI Properties Group, meanwhile, posted a 14.7% YoY decline in net profit to RM920.87 million for FY17 ended June 30 from RM1.08 billion in FY16.

Revenue surged 38% YoY to RM4.19 billion, driven by its township development in the Klang Valley, coupled with its overseas projects — mainly in Singapore.

For 4Q, the property developer’s net profit dipped 13.5% YoY to RM336 million despite revenue rising 34% YoY to RM1.19 billion on better performance in its property development, investment, as well as leisure and hospitality divisions.

The company noted its property development segment recorded revenue and operating profit of RM1.08
billion and RM486 million respectively in 4Q on higher sales take-up rate for its Trilinq project in Singapore.

IOI Properties Group’s property investment revenue increased by 8% YoY for the quarter to RM77.4 million, while operating profit decreased 99% YoY to RM500,000.

The increase in revenue was mainly contributed by increase in average occupancy and rental rates for both retail and office segments, and the decrease in operating profit was due to the one-off property, plant and equipment write-off of RM43.3 million.

The group’s leisure and hospitality division recorded revenue of RM40.9 million and operating loss of RM1.4 million for the quarter.

The increase in revenue was mainly derived from Le Meridien by Starwood in Putrajaya, which commenced operations in August 2016, while the decrease in operating profit was mainly due to lower average room rates in the competitive hotel segment, coupled with the increase in operating expenses and lower golfing activities at the Palm Garden Golf Club.

IOI Properties Group expects its retail and office developments within matured townships and high-growth corridors would continue to enjoy healthy occupancies and rental yields.

“With sizable landbank in strategic locations both in Malaysia and overseas, coupled with a strong track record of delivery, the company is well-positioned to adapt to market demand,” it added.