IOI profit for first quarter jumps to RM451m

All major business divisions post higher revenue

KUALA LUMPUR: IOI Corp Bhd’s net profit soared almost 80% to RM451.52mil for its first quarter (Q1) ended Sept 30, from RM255.7mil in the previous corresponding period.

Revenue was 64% higher at RM3.12bil against RM1.9bil previously. Its Q1 net profit was 25% of analysts' consensus forecast of RM1.8bil for FY08.

All major business segments reported improved revenue on higher palm oil prices, increased volume for resource-based manufacturing and higher sales of properties, IOI Corp said in a statement.

“The group's pre-tax profit for Q1 is RM628.25mil, an increase of 85% compared with RM338.74mil a year ago, contributed by better performance in all major business segments,” it said. Earnings per share rose to 7.37 sen from 4.22 sen.

Year-on-year, plantation earnings were 134% higher to RM397.5mil, boosted by significantly higher crude palm oil (CPO) prices.

Average CPO prices realised in Q1 was RM2,473 per tonne compared with RM1,483 per tonne in the previous corresponding period.

Its resource-based segment reported 33% rise in operating profit to RM122.8mil with the inclusion of profit from Pan Century Group and volume growth.

Its property segment continued to perform well, with operating profit growing 37% to RM109.7mil from RM80.1mil before, driven mainly by higher demand for commercial and high-end residential properties.

“The percentage increase of the group's net earnings level is lower than the percentage at pre-tax level due mainly to higher tax expense as a result of the expiry of certain tax incentives at the end of the year ended June 30 (FY07),” IOI Corp added. It said all business segments were expected to further improve in performance for FY08. The plantation segment in particular was expected to benefit from higher trending palm oil prices.

In a separate filing with Bursa Malaysia, IOI Corp proposed for its subsidiary IOI Resources (L) Bhd to issue up to US$600mil nominal value five-year unsecured guaranteed third exchangeable bonds, which were exchangeable into new IOI Corp shares.

“The gross proceeds from the proposed bonds issue will be utilised to fund capital expenditure, investment or acquisition opportunities, working capital and to defray the estimated expenses of the bonds issue,” it said.

By The Star