IOI Corp FY2021 net profit surges to RM1.39 bln on back of higher CPO price

KUALA LUMPUR, IOI Corporation Bhd’s net profit for the financial year ended June 30, 2021 (FY2021) surged to RM1.39 billion from RM600.90 million in the same period last year.

Revenue increased to RM11.25 billion from RM7.8 billion previously.

The plantation group told the stock exchange the better performance was due to higher contribution from all segments.

For the plantation segment, its profit of RM1.21 billion was 72 per cent higher than the RM701.5 million profit in FY2020.

“The higher profit reported was due mainly to higher crude palm oil (CPO) and palm kernel (PK) prices realised, partly offset by lower fresh fruit bunches (FFB) production. Average CPO and PK prices realised for FY2021 were RM3,076 a tonne versus RM2,314 a tonne in FY2020 and RM2,115 (FY2021) a tonne against RM1,375 a tonne in FY2020 respectively,” it said in notes accompanying the results.

The group said its resource-based manufacturing segment’s profit of RM668.0 million for FY2021 was 73 per cent higher than the profit of RM385.1 million reported for FY2020.

“The significant higher profit was due mainly to a higher share of associate results from Loders which included a share of a one-off gain of RM268.3 million from the sale of its refinery located in Rotterdam as well as better performance from North America and Europe. Apart from (that), a lower contribution was reported by all sub-segments mainly due to lower margin,” it shared.

Moving forward, the planter expects CPO price to remain strong and noted that it hovered at between RM4,300 and RM4,500 per tonne in August 2021 as the end-July Malaysian palm oil stocks fell to 1.5 million tonnes, mainly due to weaker than expected FFB production.

“The production weakness is largely attributed to worker shortage and restrictive measures contained in the pandemic-related standard operating procedures (SOPs). We anticipate that this challenging operating environment will continue for the near term, thus indirectly lending support to the strong CPO price trend at least for the next few months,” it said.

Overall, the group sees its overall financial performance in the new financial year to be better, underpinned by the strong performance from its plantation segment.

Meanwhile, in a separate filing, IOI Corp announced that its board has resolved to extend the revised timeframe for an additional 18 months, which is the second revised timeframe, to utilise the remaining proceeds received from the disposal of 70.0 percent of its equity interest held in Loders Croklaan Group B.V.

The second revised timeframe will enable the board to further identify and evaluate the feasibility of potential investments and formulate its group strategies holistically, it said.

The board had on Feb 18, 2020 announced the revised timeframe for the utilisation of proceeds from the disposal.

Source: BERNAMA News Agency