IOI Corp profit nearly halves in 1Q on absence of hefty forex gains

KUALA LUMPUR (Nov 26): IOI Corp Bhd’s (KL:IOICORP) first-quarter net profit fell 48% from last year’s high base, which was boosted by large foreign exchange (forex) gains.

Net profit for the three months ended Sept 30, 2025 (1QFY2026), dropped to RM369.4 million from RM710.7 million a year earlier, as revenue climbed 14.2% to RM3.05 billion from RM2.67 billion, according to the plantation group’s bourse filing on Wednesday (Nov 26).

The group booked a forex gain of RM1.4 million in 1QFY2026, dwarfed by the RM365.9 million logged in 1QFY2025. Excluding non-underlying items, which also includes fair value changes, underlying profit before tax was up 41.7% at RM508.8 million versus RM359.1 million.

No dividend was proposed for the quarter.

The group said the upstream segment saw higher average released prices of crude palm oil (CPO) and palm kernel, while fresh fruit bunches (FFB) production also improved.

For the downstream segment, its resource-based manufacturing segment saw higher underlying earnings from its refinery and oleochemical subsegments, which saw better margins. However, it faced a RM41.7 million fair value loss on derivatives, compared to a RM70.3 million gain in the same quarter last year.

IOI Corp expects crude palm oil (CPO) prices to stay supported due to possible La Niña-related supply disruptions, seasonally low output from November to February and festive demand early next year. It forecasts CPO prices to remain above RM4,200 per tonne over the next three to four months.

The group said fresh fruit bunch (FFB) production should rise as more palms reach prime and mature age.

However, its downstream business remains weak. Refining and commodity marketing margins are low or negative, while oleochemicals face tough conditions due to soft consumer demand.

IOI Corp also noted that expected US interest rate cuts may strengthen the ringgit but US trade politics and geopolitical tensions could still cause currency volatility.

IOI Corp's shares ended one sen or 0.25% lower at RM4.07, valuing the group at RM25.58 billion.