IOI Corp’s best quarterly results of RM581m net profit

KUALA LUMPUR: IOI Corporation Bhd posted its best quarterly results for the second quarter to Dec 31, 2007, with a net profit of RM581.19 million, driven by record high palm oil prices, increased volume for resource-based manufacturing and higher property sales.

Revenue rose to RM3.46 billion from RM2.24 billion a year ago, while earnings per share was 9.67 sen. IOI Corp has declared a gross interim dividend of 70% or 7 sen per 10 sen share.

For the six-month period, net profit surged 62% to RM1.03 billion from RM638.27 million previously.

Announcing its latest results yesterday, IOI Corp said plantation earnings for 1H08 doubled to RM867.6 million boosted by significantly higher crude palm oil prices.

“Average CPO prices realised for 1H08 areRM2,572 per tonne as compared with RM1,560 for the same period last year,” it said.

On its resourced-based manufacturing segment, the company said operating profit rose by 55% at RM281.8 million with the inclusion of profit from Pan Century Group as well as volume and margin growth from its three sub-segments.

IOI Corp said its property segment registered a 14% increase in operating profit to RM204.7 million compared with RM179.1 a year earlier on demand for high-end residential properties.

Kenanga Investment Bank Bhd analyst Yin Shao Yang said IOI Corp’s results were anticipated, adding that the year-on-year (y-o-y) improvement in all of its segments was commendable.

“The main thrust for its performance was the high CPO price. We are forecasting RM2.1 billion net profit for the full year, but it could surprise us should CPO prices remain at current levels,” he said.

Yin said Kenanga Research forecast CPO prices to average at RM3,100 per tonne in 2008.

Meanwhile, IOI Corp’s property unit IOI Properties Bhd has rewarded its shareholders with a higher gross interim dividend of 70 sen a share after announcing a 26.6% rise in net profit for the second quarter ended Dec 31, 2007 to RM90.9 million from RM71.78 million a year ago, on the back of a 14% increase in revenue to RM191.3 million.

In the previous corresponding period, it paid out 35 sen gross interim dividend.

In a separate statement yesterday, IOI Properties said earnings per share for 2Q was 27.93 sen, while net assets per share stood at RM6.54.

The company said its operating profit from property development activities for the first six months increased by RM21.8 million.

“The group also benefited from higher incidental palm oil revenue from its landbank as well as gain of about RM16.7 million from the disposal of non-current assets held for sale,” it said.

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