IOI 2Q net profit surges 174%, declares seven sen dividend

KUALA LUMPUR: IOI Corp Bhd's net profit for the second quarter ended Dec 31, 2009 (2QFY10) surged 174% to RM461.21 million from RM168.58 million a year ago, thanks to higher profits from property and manufacturing segments and unrealised paper gain on US dollar-denominated borrowings.

According to a Bursa Malaysia filing on Feb 10, the company posted revenue of RM3.06 billion versus RM3.72 billion in 2QFY09 while basic earnings per share rose 170% to 7.71 sen from 2.86 sen.

IOI said its plantation segment reported a 39% decrease in operating profit to RM319.9 million for 2QFY10 as compared to RM527.8 million in 2QFY09, adding that the lower profit was mainly due to lower crude palm oil (CPO) prices realised as well as lower fresh fruit bunches (FFB) production.

"Average CPO prices realised for 2QFY2010 is RM2,225/MT compared to RM3,081/MT for 2QFY2009", the company said in notes accompanying its results.

IOI noted that its resource-based manufacturing segment reported an operating profit of RM145.4 million in 2QFY10 from a loss of RM85.3 million in the previous comparable quarter.

The company said its property segment’s operating profit of RM125.4 million for 2QFY10 is more than double the profit in the same quarter a year ago, contributed mainly by increased sales of higher end residential properties and commercial properties in the Klang Valley.

The plantation giant also announced an interim single-tier dividend of 70% or seven sen per share of 10 sen each which is not taxable in respect for year ending June 30, 2010.

For the six months ended Dec 31, 2009, IOI's net profit jumped 105% to RM939.59 million from RM459.08 million in the same half the year before on the back of revenue that fell 92% to RM6.33 billion from RM8.38 billion.

Basic earnings per share for the half rose to 15.72 sen from 7.75 sen previously.

On current year prospects, IOI said: "The global economy is showing signs of improvement but will continue to make the current financial year a challenging period for businesses.

Nevertheless, the group is optimistic that it will perform better in the current financial year."

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