PETALING JAYA: IOI Corp Bhd
expects its performance for financial year 2025 (FY2025) to remain resilient and satisfactory on the back of a number of factors.
In a filing with Bursa Malaysia, the palm oil player said the anticipated better soybean harvest in the US as well as higher palm oil output will pose challenges to the crude palm oil price (CPO).
However, a stronger demand from importing countries is likely before the implementation of the European Union Deforestation Regulation, combined with concerns over extreme weather and intensified geopolitical tensions disrupting supply chains.
The group said for its plantation segment, fresh fruit bunches (FFB) production is projected to be higher for FY2025 than FY2024 despite the accelerated program in Sabah.
“The growth is expected to be driven by the continuing labour productivity improvement in Peninsular Malaysia and increased FFB production from our young trees. Consequently, CPO production cost is also anticipated to be lower than in FY2024.
“Overall, we hold a positive outlook on the plantation segment’s financial and operating performance in FY2025,” it said.
For its refinery and commodity marketing sub-segment, as well as oleochemical sub-segment, low refining margins and global uncertainties have affected the market.
IOI Corp also noted that the strength of the ringgit against the US dollar will result in a significant foreign exchange translation gain on its dollar-denominated borrowings in the first quarter of FY2025.
“Although it is difficult to forecast the ringgit-dollar exchange rate, we expect the ringgit to be on a much stronger footing in FY2025 compared to FY2024 due to the Malaysian economy’s strong growth during first half of 2024 and the widely-anticipated decline in US interest rates towards the end of the year,” it said.
For FY2024 ended June 30, 2024, the group registered a lower net profit of RM1.10bil compared to RM1.11bil a year ago.
Its revenue was also lower at RM9.60bil for the year under review compared to RM11.58bil.
The group said the decrease in both were mainly due to lower contribution from the resource-based manufacturing segment as well as lower share of associates results.
It was however partially mitigated by higher contribution from the plantation segment.
“The higher margins recorded in FY2023 were due to stronger customer demand, driven by global supply chain disruptions. In addition, Indonesia’s policy restricting CPO exports during that period also contributed to the better margins,” it said.
As for its quarterly results, the group posted a higher profit and revenue of RM346.9mil and RM2.5bil respectively for the quarter ended June 30, 2024.
The board declared a second interim single tier dividend of 5.0 sen which will be payable on Sept 26, 2024.
The first interim single tier dividend of 4.5 sen per ordinary share was earlier announced on Feb 23, 2024, bringing the total cash dividend declared to date for the current financial period single to 9.5 sen.
