The Edge Markets (27/09/2021) - KUALA LUMPUR (Sept 27): IOI Corp Bhd expects the fresh fruit bunch (FFB) production to be stable next year as the higher production from young palm trees at its Indonesian plantations offsets the production loss from its accelerated replanting programme in Sabah, according to its group managing director and chief executive officer Datuk Lee Yeow Chor.
In his key messages on the group's 2021 annual report, Lee said it also has accelerated its mechanisation programme in various field operations to alleviate the worker shortage challenge in the group's estates.
"Overall, with the anticipated strong crude palm oil (CPO) price during the first half of FY22 (financial year 2022), we expect the plantation segment to continue to perform well in the new financial year.
"The Malaysian refinery industry margin continues to be affected by the high palm oil price and the higher CPO export duty in Indonesia giving Indonesian refiners a more competitive cost advantage.
"However, our refining subsegment is expected to perform satisfactorily in the new financial year with the efficient cost structure and varied product portfolio in our Sandakan refinery complex," he said.
Meanwhile, it also expects its overall financial performance in FY22 to be better than in FY21, underpinned by the strong performance from its plantation segment as a result of the high CPO price and the improved performance from its resource-based manufacturing segment.
For the full FY21 ended June 30, 2021, the group's net profit more than doubled to RM1.39 billion from RM600.9 million reported in FY19 while annual revenue grew by 44.21% to RM11.25 billion against RM7.8 billion in FY19.
Lee added that the group initiated a five-year plan recently to transform the group from a cost-competitive palm oil producer to a high value-added diversified palm-based products producer.
Its five strategic priorities include increasing yield, optimising the workforce, diversifying crops, increasing the non-CPO segment and grow the oleochemical segment.
"These exciting developments will bode well for the group in the near to medium term," he stressed.
At 4.30pm, shares in IOI Corp traded two sen or 0.53% higher at RM3.77, giving it a market value of RM23.7 billion. It saw 985,000 shares changing hands.
Since the beginning of the year, the stock has fallen by 14.9% from a peak of RM4.64 recorded in January.
Read more at https://www.theedgemarkets.com/article/ioi-corp-expects-ffb-production-be-stable-2022-higher-production-young-palm-trees-indonesia