KUALA LUMPUR (Aug 26): IOI Corp Bhd (KL:IOICORP), Malaysia’s second largest palm oil producer, recorded a ninefold rise in its fourth quarter net profit ended June 30, 2024 (4QFY2024) to RM346.9 million or 5.59 sen per share, from RM37.2 million or 0.60 sen per share a year ago.

The earnings growth was boosted by a net foreign currency translation gain of RM24.3 million on foreign currency-denominated borrowings and deposits, compared to a loss of RM171.5 million the previous year.

Additionally, there was a net fair value gain of RM5.6 million on biological assets, contrasting with a loss of RM2.8 million in the prior year.

The company also saw a higher net fair value gain on derivative financial instruments, which rose to RM61.7 million from RM15 million. Furthermore, the group saw a reversal of impairment loss on  receivables of RM13.2 million for 4QFY2024.

IOI Corp’s quarterly revenue also climbed 30.19% to RM2.54 billion from RM1.95 billion.

The group declared a second interim single-tier dividend of five sen per share, bringing its full-year dividend to 9.5 sen per share, from 11 sen.

Regarding the breakdown of segments, IOI Corp said its plantation segment recorded a profit of RM314.2 million, which was 26% higher than the profit of RM250.1 million in 4QFY2023 due to higher crude palm oil (CPO) and palm kernel (PK) prices realised and higher fresh fruit bunch (FFB) production, as well as lower estate costs.

FFB production rose to 650,000 metric tonnes (mt) from 620,000 mt a year earlier, while the average realised prices for CPO and PK for the quarter increased by 5.43% and 18.77% year-on-year to RM4,118 per mt and RM2,493 per mt, respectively.

Profit from its resource-based manufacturing segment also rose to RM142.2 million as compared to RM47.4 million for 4QFY2023, mainly due to higher margins from the refining sub-segment as well as higher share of associates results, partially offset by lower margins from the oleochemical sub-segment.

For the full FY2024, the group’s net profit slipped to RM1.109 billion from RM1.11 billion a year earlier, as revenue fell 17.09% to RM9.6 billion from RM11.58 billion.

Going forward, IOI Corp expects higher demand from importing countries as Europe stocks up before the implementation of European Union Deforestation Regulation, combined with concerns over extreme weather and intensified geopolitical tensions disrupting supply chain, which will provide support to CPO prices.

“For our refinery and commodity marketing sub-segment, the outlook remains subdued due to low refining margins. This is largely due to overcapacity of refineries in Indonesia as well as the raw material price advantage from the country’s CPO export duty policy.

"However, we expect our refining margins to improve due to our capabilities in producing low contaminants oils and our focus on cost optimisation," it said.

Shares of IOI Corp closed unchanged at RM3.79 on Monday, valuing the group at RM23.82 billion.