PETALING JAYA: IOI Corp Bhd
expects its performance for financial year 2025 (FY25) 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 United States as well as higher palm oil output will pose challenges to the crude palm oil (CPO) price.
However, 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 bunch (FFB) production is projected to be higher for FY25 than FY24 despite the accelerated programme 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, the CPO production cost is also anticipated to be lower than in FY24. Overall, we hold a positive outlook on the plantation segment’s financial and operating performance in FY25,” 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 FY25.
“Although it is difficult to forecast the ringgit-dollar exchange rate, we expect the ringgit to be on a much stronger footing in FY25 compared to FY24 due to the Malaysian economy’s strong growth during the first half of 2024 and the widely-anticipated decline in US interest rates towards the end of the year,” it said.
For FY24 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. It said the decrease in both was 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 FY23 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 net profit and revenue of RM346.9mil and RM2.5bil, respectively, for the quarter ended June 30, 2024.
The board has declared a second interim single-tier dividend of five 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 to 9.5 sen.
