Malaysia’s second-largest palm oil producer IOI Corp reported a 65 percent jump in quarterly net profit and flagged a recovery in earnings for the full year.
“The global economic slowdown is showing signs of improvement but will continue to make the current financial year a challenging period for businesses,” IOI said in a statement on Tuesday.
“Nevertheless, the group is optimistic that it will perform better in the current financial year, it said.
Crude palm oil prices are recovering from a low of 1,331 ringgit per tonne reached in October last year, led by a strong recovery in demand, fears of rainy weather cutting into output and a weaker U.S. dollar. Palm oil prices closed at 2,478 ringgit on Tuesday. [POI/]
Earlier this month, Wilmar International, the world’s largest listed palm oil firm, signalled a promising earnings outlook.
IOI, with a market value of $10 billion, posted July-September net profit of 478.4 million ringgit against 290.5 million ringgit a year ago, helped by higher profit contributions from the property and manufacturing divisions.
Analysts do not provide quarterly earnings forecasts for Malaysian companies.
Ahead of the results, 22 analysts polled by Thomson Reuters I/B/E/S had forecast IOI will book on average a full-year net profit of 1.7 billion ringgit versus 983.5 million ringgit in fiscal 2009.
IOI, which has oil palm estates in Malaysia and Indonesia, said operating profit in the plantation division fell 56 percent due to weaker palm oil prices and lower production.
The average crude palm oil price realised for the quarter was 2,294 ringgit per metric tonne, 32 percent lower than a year earlier, it said.
IOI shares have gained 56 percent this year, outperforming a 45 percent rise in the broader market index .KLSE, but lag the 72 percent gain for Malaysia’s top plantation firm Sime Darby.
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