PETALING JAYA: IOI Corp Bhd expects higher fresh fruit bunch (FFB) production in second quarter of calendar year 2025, due to improved weather conditions and the end of a low production cycle.

The plantation group said the expected production rise, resulting in higher palm oil stock, is likely to exert downward pressure on crude palm oil (CPO) prices.

However, the resumption of demand from major buyers, following an earlier slowdown, and Indonesia’s B40 biodiesel mandate are expected to provide key price support moving forward.

Releasing its results for the third financial quarter ended March 31, 2025 (3Q25), yesterday, IOI Corp reported net profit more than doubling year-on year (y-o-y) to RM262.3mil, underpinned by an 11.1% revenue growth to RM2.74bil.

For the nine months ended March 31 (9M25), the group posted a net profit of RM1.08bil, a 42.2% y-o-y jump, as turnover also grew by 18.6% to RM8.37bil.

IOI Corp said the improved 3Q25 and cumulative results were primarily due to better contributions from its plantation segment, which benefited from higher CPO and palm kernel prices realised, as well as a higher share of associates’ results.

Nevertheless, the group said this was partially offset by higher CPO stock levels, lower FFB production, and a lower oil extraction rate.

The better performance led to earnings per share improving to 4.23 sen for 3Q25 and 17.47 sen for 9M25.

Total dividends declared by IOI Corp stood at five sen per share, with the company not proposing any dividend for 3Q25 but having declared the aforementioned five sen in 2Q25.

Separately, the group said the recent price correction has improved palm oil’s competitiveness relative to other vegetable oils.

“Taking these factors into account, we project CPO prices to range between RM3,700 and RM4,000 per tonne for the rest of our financial year ending June 30, 2025,” it said in a filing to Bursa Malaysia.

Furthermore, the group said FFB production for 4Q25 is expected to recover significantly over 3Q25, anticipating that this higher production will help sustain steady financial performance despite the lower CPO prices expected for the quarter ending June 30.

It added that the relatively high palm kernel oil price has kept sales volume and margins subdued for some time, but going forward, the recent decline in palm kernel oil price is expected to support improved sales volume and margins.

“Coupled with our continued focus on operational efficiency and cost optimisation, we anticipate to maintain our financial performance in the final quarter for the financial year ending June 30, 2025,” said IOI Corp.