Higher CPO gives IOI higher profit
Filed Under (Business News) by Webmaster on 25-08-2010
Tagged Under : IOI Corp
IOI Corp Bhd’s net profit rose 12.3% to RM547mil in the fourth quarter ended June 30 against the corresponding quarter of last year mainly contributed by higher crude palm oil (CPO) prices.
This was despite a marginal decrease in revenue to RM3.06bil for the quarter under review from RM3.12bil previously.
As a result, earnings per share (EPS) for the quarter climbed to 8.57 sen from 8.21 sen a year ago.
According to IOI Corp, its plantation segment posted a 6% increase in operating profit to RM274.5mil for the quarter under review from RM259.3mil a year earlier.
Average crude palm oil prices realised for the quarter was RM2,504 per tonne compared with RM2,455 a year earlier.
Its property segment’s operating profit of RM190.8mil for quarter under review was 28% lower than a year ago due to lower appreciation in the value of investment properties of the group.
Its resource-based manufacturing segment reported a 28% lower operating profit of RM135.7mil for the fourth quarter, mainly due to lower margins from the refinery operations.
“In Q4’10, the net fair value gain recognised was RM21mil compared with RM110.8mil in Q4’09. But after excluding the net fair value gain, the operating profit for Q4’10 would be 9% higher than Q4’09,” said IOI Corp in its filing with Bursa Malaysia yesterday.
For the full year, IOI Corp reported 107% increase in net profit in financial year 2010 ended June 30 (FY10) to RM2.03bil from RM983.5mil in FY09.
The group said the higher profit was mainly due to unrealised translation gain on long-term US dollar denominated borrowings of RM395.8mil (FY09 – unrealised loss of RM315.3mil) and no further impairment loss at the jointly controlled property entity in Singapore during FY10 (FY09 – loss of RM258.6mil).
“The plantation segment reported a 31% decrease in operating profit to RM1.13bil for FY10 compared with RM1.64bil for FY09.
“The lower operating profit was due mainly to lower average CPO prices for FY10 at RM2,372 per tonne compared with RM2,831 per tonne in FY09.
“The resource-based manufacturing segment reported an operating profit of RM568.6mil for FY10, which is 59% higher than FY09.
“The lower profit in FY09 is due mainly to realised foreign exchange losses on derivative contracts and customer defaults on high priced contracts incurred.
“Our property segment’s operating profit of RM602.9mil for FY10 is 29% higher than the RM467.0mil recorded for FY09, mainly due an overall increase in sales,” said the group.
IOI Group also yesterday proposed a second interim single-tier dividend of 100% or 10 sen per ordinary share of 10 sen each which is not taxable in the hands of the shareholders in respect of the financial year ended June 30, 2010.
The ex date for the dividend is Sept 23 and the entitlement date is Sept 27.
According to OSK Research analyst Alvin Tai, IOI Corp’s core earnings for FY10 was slightly better than expected while pre-tax profit was in line with estimates.
IOI Corp FY10 net profit was just below consensus estimates at RM2.048bil.
“Going forward, production of palm oil and prices are expected to be better in the current financial year,” he said.
