IOI Corp flags tough downstream outlook despite earnings jump
KUALA LUMPUR (Feb 24): IOI Corporation Bhd (KL:IOICORP), one of the world’s largest palm oil producers, flagged a tough downstream outlook even as earnings jumped in the recently-ended quarter.
The outlook for its mainstay plantation business, however, is positive as output rises with a larger proportion of its trees reaching prime producing age, IOI Corporation said. Crude palm oil is expected to be supported above RM4,000 per tonne over the next three months, the company said.
“We remain positive on the outlook of the plantation segment and expect it to deliver resilient financial performance in FY2026,” IOI Corporation said.
Net profit for the three months ended Dec 31, 2025 (2QFY2026), was RM528.50 million, a near fivefold gain from RM111.10 million in the same period a year earlier, thanks largely to foreign currency translation gain on foreign currency denominated borrowings and deposits, a bourse filing showed.
Revenue for the quarter, meanwhile, edged up 1% to RM3.01 billion as average selling prices fell despite higher production volume. The company also declared a dividend of 5.5 sen per share payable March 24.
Downstream outlook tough
Operating conditions for IOI Corporation’s refining and marketing as well as oleochemical sub-segments are expected to remain challenging, the company cautioned.
At its refinery and commodity marketing sub-segment, sales margins are expected to remain under pressure due to elevated inventory levels and intense competition from Indonesian producers, the company said.
Subdued customer sentiment and competition, including from Indonesian producers, would continue to weigh on the margin and sales volume of its oleochemical units, IOI Corporation noted.
For the speciality fats sub-segment, “good sales margin” for cocoa butter equivalents is expected to underpin the better performance in Asia while the completion of the expansion of the New Orleans plant in the next six months will strengthen its American operations, the company said.
For the first six months of its financial year, net profit totalled RM897.9 million or about 9% higher when compared to the same period a year earlier. Cumulative revenue rose 7.5% year-on-year to RM6.06 billion.
Overall, IOI Corporation said it expects its operating and financial performance for the remaining quarters of FY2026 to be “resilient”.