This article first appeared in The Edge Financial Daily on February 21, 2019

KUALA LUMPUR: A lower contribution from the plantation segment, coupled with net foreign currency translation losses on its foreign currency-denominated borrowings and deposits, dragged IOI Corp Bhd’s net profit down 67% for the second quarter ended Dec 31, 2018 (2QFY19).

Consequently, its 2QFY19 net profit fell to RM195.5 million from RM595.9 million for the previous year, which trimmed earnings per share to 3.11 sen from 9.48 sen. Revenue slipped 6.4% to RM1.88 billion from RM2.01 billion, according to the group’s stock exchange filing yesterday.

Notwithstanding the weaker quarterly results, the group declared a first interim dividend of 3.5 sen, which will be paid on March 22. In comparison, the group posted a 4.5 sen payout for the same quarter of the previous year.

The group said it incurred a net foreign currency translation loss of RM22.8 million during the quarter under review, versus a gain of RM188.1 million for the corresponding quarter last year.

The plantation segment, meanwhile, was impacted by lower crude palm oil (CPO) and palm kernel (PK) prices, which pulled the segment’s profit down by 66% year-on-year to RM117.3 million. “The average CPO price realised for 2QFY19 was RM1,932/tonne (2QFY18: RM2,644/tonne) and the average PK price realised for 2QFY19 was RM1,444/tonne (2QFY18: RM2,621/tonne),” the group said.