IOI Q1 profit falls 48pc to RM258.1m

Kuala Lumpur: IOI Corp Bhd's first quarter profit ended September 30 plunged 48 per cent to RM258.10 million, despite its plantation business doing better from a year ago.

In its filing to the stock exchange yesterday, IOI explained the lower profit was due mainly to paper loss in foreign exchange contracts and borrowings amounting to RM271.7 million. It also saw lower earnings from its oleochemicals, specialty fats and property development businesses.

IOI's plantation segment profit jumped 56 per cent to RM557.1 million from RM356.4 million, thanks to 11 per cent more harvest of fresh fruit bunches at higher palm oil prices. 

Average palm oil price realised in the quarter was RM3,149 per tonne, 21 per cent more than RM2,598 per tonne recorded a year ago.

The group's oleochemical and specialty fats operations, however, saw lower profits of RM33.2 million on slower sales at lower margins. Nevertheless, the group intends to move further downstream. In the next two years, it is investing RM130 million to build a new fatty ester and specialty oleo derivative plant with a capacity of 20,000 tonnes per year, at its Prai Industrial Complex in Penang.

During the quarter, profits from property sales only amounted to RM116.6 million, 31 per cent less than RM168.2 million a year ago.

On its outlook for the current year ending June 2012, IOI said the global economic growth is showing signs of a slowdown. "Though challenging, we remain optimistic on strong plantation earnings," it added.

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