KUALA LUMPUR: IOI Corporation Bhd’s net profit in the second quarter ended Dec 31, 2021 (Q2) rose to RM494.70 million compared with RM355.70 million in the same period a year ago, bolstered by higher crude palm oil (CPO) price.

       Revenue surged to RM4.11 billion from RM2.45 billion previously, it said in a filing to Bursa Malaysia today.

       IOI said the plantation segment profit jumped 69 per cent to RM576.0 million year-on-year due mainly to higher realised CPO and palm kernel (PK) prices.

       Average realised CPO and PK prices in Q2 was stronger at RM4,565 per tonne and RM3,678 per tonne respectively.

       Meanwhile, the resource-based manufacturing segment profit increased to RM152.8 million from RM21.2 million in Q2.

       The higher profit was due mainly to higher contribution from oleochemical sub-segment with improvement in margins but offset by lower contribution from the refining sub-segment.

       IOI expects its performance during the remaining period of its financial year 2022 (FY2022) to be positive on the back of strong performance from the plantation segment.

       The CPO price is moving close to the RM6,000 per tonne mark, following news of India’s import duty cut as well as Indonesia’s new palm oil export restriction rules.

       It anticipates the CPO price to remain strong until at least the middle of this year, supported by the global edible oil supply tightness as well as the growth in global economy.

       '’For our plantation segment, the fresh fruit bunches production for the remaining periods of FY2022 is expected to be impacted by the seasonal effects, labour shortage as well as other operational disruptions due to the recent Omicron outbreak.

       ‘’Nevertheless, with the strong palm oil price and intensified mechanisation initiatives in our estates, the plantation segment is expected to perform well during the rest of the current financial year,’’ IOI said.

       The company also expects the performance of the refinery and commodity marketing sub-segment to remain resilient due to its efficient business model in respect of the Sabah refinery.

       The palm refining and kernel crushing margins in Malaysia continue to be affected by the high CPO and kernel prices as well as export duty regulations in Indonesia, it said.

       For the oleochemical sub-segment, product margins are expected to be affected by the sharp rise in palm kernel oil feedstock price since December 2021, although the pent-up demand for its products remain strong due to the earlier supply chain bottlenecks and in line with the global economic growth, it added.

       IOI also foresees an improvement in the operating performance of the specialty fats sub-segment by associate company, Bunge Loders Croklaan, despite challenges such as high freight and rising energy costs. - Bernama