KUALA LUMPUR: IOI Corporation Bhd saw its earnings surge to RM595.90mil in the second quarter ended Dec 31, 2017 from the RM15.60mil a year ago, boosted by foreign currency translation gain.
The plantation heavyweight said on Friday its profit before taxation (PBT) surged over 1,000% to RM622.9mil from RM52.5mil a year ago.
IOI Corp explained the higher PBT was due mainly to net foreign currency translation gain on foreign currency denominated borrowings of RM196.4mil compared with a loss of RM330mil a year ago.
There was also a fair value gain on derivative financial instruments from the resource-based manufacturing segment of RM66.1mil compared with a loss of RM46.5mil.
Excluding these two factors, the underlying PBT of RM360.4mil for Q2 FY2018 was down 16% than the RM429mil a year ago.
“The lower underlying PBT is due mainly to lower contribution from all the segments,” it said.
Its revenue fell 4% to RM2.39bil from RM2.50bil. Earnings per share were 9.48 sen compared with 0.25 sen. It declared an interim dividend of 4.5 sen, similar to a year ago.
IOI Corp said the plantation profit for Q2 FY2018 fell 5% to RM340.9mil due mainly to lower crude palm oil (CPO) and palm kernel (PK) prices realised despite higher fresh fruit bunches (FFB) production.
Average CPO and PK prices realised for Q2 FY2018 were RM2,644 a tonne (Q2 FY2017 – RM2,768) and RM2,621 (Q2 FY2017 – RM2,882) respectively.
As for the resource-based manufacturing segment, its profit rose to RM128.3mil from RM71.9mil a year ago.
Excluding the fair value gain/loss on derivative financial instruments, the underlying profit was 47% lower at RM62.2mil. This is mainly due to loss reported from the merchandising activities, mitigated by better performance from the oleochemical sub-segment.
Discontinued operations (resource-based manufacturing)
It reported lower profit from the discontinued operations of RM77.5mil compared with RM62.9mil a year ago. The discontinued operations comprise of the resource-based manufacturing businesses pending the divestment of 70% equity interest in Loders Croklaan Group B.V.. The higher profit for Q2 FY2018 was due mainly to the higher sales volume achieved
For the first half, its earnings jumped nearly 600% to RM965.90mil from RM120.40mil in the previous corresponding period. Its revenue slipped 5% to RM4.60bil from RM4.83bil.
It recorded net foreign curency translation gain of RM265mil compared with loss of RM502mil a year ago.