This is despite its revenue surges 47% YoY to RM3.63b higher contributions from all its business segments
by ANIS HAZIM / pic by TMR FILE
IOI Corp Bhd’s earnings for the first quarter ended Sept 30, 2021 (1Q22), totalled RM277.6 million, similar to the RM277.9 million net profit the group made in 1Q21.
Higher effective tax rate for the quarter saw earnings remain flat despite its revenue rising 47% year-on-year (YoY) to RM3.63 billion in 1Q22 on higher contributions from all its business segments.
Earnings per share for the period amounted to 4.45 sen. The group did not declare any dividend for the period.
In a filing to Bursa Malaysia yesterday, the group noted that its upstream plantation segment posted a 78% YoY higher profit of RM487 million in the quarter on higher crude palm oil (CPO) and palm kernel prices realised but partly offset by lower fresh fruit bunch production.
IOI expects CPO price to remain high until early 2022 supported by the global edible oil supply tightness and sustained demand as the global economy continues to improve.
“For our plantation segment, the CPO production is expected to be lower than initially anticipated due to the impact from adverse weather arising from the La Nina phenomenon and unresolved labour shortage situation,” IOI stated in its filing.
The performance of its refinery and commodity marketing sub-segment is forecast to be satisfactory due to the positive margins and the strategic location of its refinery complex in Sandakan, Sabah.
IOI noted that the hike in raw material prices coupled with persistent high freight costs pose a huge challenge to its sub-segment.
“Nevertheless, we believe our relentless effort to strive for cost efficiency, enhanced productivity and growth in specialty business will enable the sub-segment to sustain its profitability,” it stated.
On its specialty fats sub-segment, IOI expects it to perform better in the current financial year, supported by a good performance from the North American region and new product launches.
IOI also expected the US dollar-ringgit exchange rate to remain volatile in the near term.
The group views its overall operating performance for the remaining periods of the current financial year to be good on the back of strong performance from its plantation segment.
IOI’s share price closed one sen or 0.27% higher at RM3.77 yesterday, valuing the group at RM23.5 billion.