IOI Corp earnings surge 52% in Q2

IOI Corp earnings surge 52% in Q2
By IZWAN IDRIS
PETALING JAYA: IOI Corp Bhd's net income surged 52% in the second quarter ended Dec 31, as soaring palm oil prices boosted profits from plantation and resource-based manufacturing businesses.
The three-month earnings swelled to a record RM581.2mil, or 9.71 sen per share, compared with RM382.6mil, or 6.25 sen per share, a year earlier.
Revenue jumped to RM3.46bil from RM2.26bil before.
IOI Corp released its latest quarterly results during the market's midday break, reflecting a growing trend among big corporations to announce vital corporate development to investors in a more effective manner.
“The stock is pricey at these levels, but the premium could be justified given its size, trading liquidity and probably because most people consider IOI Corp to be the best proxy for rising palm oil prices,'' a local fund manager said.
Last year, IOI Corp bought its first overseas plantation land in Indonesia and acquired a rival refinery in Johor. Last month, the company announced a plan to raise RM600mil in fresh capital to help fund further expansion.
IOI Corp shares closed 20 sen higher at RM8.15 yesterday on volume of 13.3 million.
The stock hit a record RM8.55 a month ago.
IOI Corp's six-month earnings jumped 62% to RM1.03bil against RM638mil a year earlier.
The company said its palm oil fetched RM2,572 a tonne during the six months, up from RM1,560 a tonne in the year before.
“Barring unforeseen circumstances, all business segments are expected to continue to perform well in FY08,'' it told Bursa Malaysia.
The crude palm oil (CPO) futures on Bursa Derivatives, the global benchmark, had risen 80% over the past one year amid fears the global edible oils market was in short supply to meet growing demand worldwide.
The CPO futures contract for April delivery jumped RM91 to RM3,451 a tonne yesterday, its highest closing price.
“We remain upbeat on CPO price prospects as supply deficits for other edible oils will encourage consumers to switch to palm oil,'' CIMB Investment Bank said in an update on the sector yesterday.
Shares in Kuala Lumpur Kepong Bhd (KLK), the third most valuable plantation stocks behind Sime Darby and IOI Corp, hit a record RM19.20 yesterday, up 60 sen.
KLK is due to announce its first quarter ended Dec 31 results on Feb 20.
In a separate statement, IOI Properties Bhd said it posted a net profit of RM91mil on sales of RM191mil for the second quarter. Its six-month net income surged to RM171mil on turnover of RM396.8mil.
The improved performance was attributed to “higher demand for residential properties”, it said.
IOI Properties proposed a gross interim dividend of 60 sen per share for the period.