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IOI pretax profits falls to RM796.03

Posted on: February 21, 2009


Bernama – Saturday, February 21

KUALA LUMPUR, Feb 20 (Bernama) — IOI Corp Bhd’s pre-tax profit for the half year ended Dec 31, 2008 fell to RM796.037 million from RM1.419 billion in the same period in 2007.

Revenue, however, surged to RM8.382 billion from RM6.580 billion previously.

In the second quarter, its pre-tax profit shrank to RM333.495 million from RM790.487 million in the corresponding quarter of the previous year, although revenue rose to RM3.727 billion from RM3.457 billion.

In a filing to Bursa Malaysia, IOI said the lower profit was mainly due to realised foreign exchange losses of RM120.9 million and customer defaults on high-priced contracts in the manufacturing segment, unrealised translation losses of RM249.6 million on US dollar-denominated long-term borrowings as well as the softening of the property market.

IOI said the plantation segment reported a 26 percent increase in operating profit to RM1.095 billion because of higher crude palm oil (CPO) prices realised from the forward sales entered into during the second half of financial year 2008.

It said the resource-based manufacturing, however, saw operating profit down to RM59.4 million compared with RM281.8 million in the corresponding period of the previous year.

The property segment’s operating profit fell 37 percent to RM129.4 million, it said.

Overall, IOI said, it expected results for the current financial year to be lower than the previous year but would still be satisfactory in the light of the current condition.

It said the group’s upstream plantations business, its higher oil yield, cost efficiency and strong financial position would put it in good stead in facing the softened CPO prices.

“With the relative stabilisation of feed stock prices and currency exchange rates since December 2008, the downstream manufacturing operations have managed to overcome the problems of customer defaults and currency fluctuations which have affected the business performance earlier.

“Therefore, going forward, the downstream manufacturing business is expected to perform better again,” it said.

Meanwhile, IOI Properties Bhd’s pre-tax profit for the half-year ended Dec 31, 2008 fell to RM125.974 million from RM228.174 million in the same period in the previous year.

Revenue dropped to RM281.345 million from RM396.800 million previously.

In the second quarter, its pre-tax profit shrank to RM50.016 million from RM119.308 million in the corresponding quarter of the previous year, and revenue fell to RM122.525 million from RM191.322 million.

IOI Properties said the decline was due to the deteriorating property market affecting its sales, whereas higher construction cost and diminution in value of development asset in a jointly controlled entity during the period under review had resulted in lower margin.

It said although the property market was expected to remain soft during the second half of the current financial year, sales of its residential units in its matured and well-located townships had not been materially affected. — BERNAMA

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