KUALA LUMPUR: Plantation group IOI Corp Bhd's net profit soared 3.4 times to RM360 million for its first quarter ended Sept 30, 2017 from RM104.8 million a year ago.
This was mainly due to net foreign currency translation gain on foreign currency denominated borrowings and lower fair value loss on derivative financial instruments from its resource-based manufacturing segment, IOI Corp said in a filing to Bursa Malaysia yesterday.
Lower fair value gain on biological assets in its plantation segment was also a contributing factor, the group added.
Group revenue for the quarter, however, dropped 5.3 per cent year-on-year to RM2.21 billion from RM2.33 billion previously.
IOI Corp expects its plantation segment to perform satisfactorily as its fresh fruit bunches production had recovered and the prices of crude palm oil and palm kernel remained high.
Its oleochemical sub-segment is also expected to perform well due to steady global economic growth, while its oil and fats sub-segment is expected to benefit from higher business volume from multinational customers and the impending trans-fat ban in the US come mid-2018.
The group added that the US dollar-ringgit exchange rate which affects the foreign exchange translation gain/loss arising from its medium to long dated dollar-denominated borrowings has become less volatile recently, due to positive macroeconomic factors locally.