By Ben Otto
IOI Corp.'s third-quarter net profit plummeted, as higher revenue was offset by currency-translation losses and weak performance by associate companies.
Net profit for the quarter ended March fell to about 100,000 ringgit ($22,917)from MYR245.8 million a year earlier, the plantation group said in a stock-exchange filing Wednesday.
Revenue rose 7.6% to MYR2.03 billion, IOI said.
Profit from associate companies fell 96% to MYR2.1 million, while the company posted MYR239.3 million in currency translation losses on foreign-currency-denominated borrowings.
Going forward, the company said the strong U.S. dollar, "though favorable for palm oil export price, is likely to result in significant forex translation loss" arising from USD-denominated borrowings.
It said it expects the financial performance of its plantation segment to be similar in the fiscal fourth quarter, with higher palm fruit production offsetting lower palm-oil prices. Refinery performance will improve on-quarter due to healthy margins, it said.
IOI said that with a strong cash position and the "resilient fundamentals" of its palm-oil business, it expected to "see through this pandemic crisis relatively unscathed."
Write to Ben Otto at ben.otto@wsj.com
(END) Dow Jones Newswires
May 27, 2020 06:12 ET (10:12 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.https://www.morningstar.com/news/dow-jones/202005273287/ioi-corp-3q-net-profit-tumbles-on-forex-losses
2020-05-27 10:12:00Z
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