Tuesday May 17, 2005 - PLANTATION and property development group IOI CorpBhd reported a 17% growth in net profit to RM175.2mil for its thirdquarter ended March 31, in spite of a seasonally low period for palm oiloutput.

IOI Corp announced to Bursa Malaysia yesterday that earnings per share(EPS) improved in tandem by 17% to 15.7 sen.

Its earnings rose 43% to RM689mil for the nine months ended March 31.During the same period, EPS rose by a smaller, but still substantial,37%.

The company said the low crop season in the third quarter (Q3) resulted ina 22% drop in the yield of fresh fruit bunches (FFB) per mature hectarecompared with the preceding quarter.

Even so, the bulk of the increase in earnings came mainly from itsplantations that, it is understood, were expanded through acquisitions.The results show the acquisitions were EPS accretive.

They also point to the strength of its management team led by executivechairman Tan Sri Lee Shin Cheng.

Tan Sri Lee Shin Cheng

Meanwhile, member company IOI Properties Bhd (IOIP) reported a 14%increase in net profit to RM65.7mil for its Q3 ended March 31.

Its net profit improved 10% to RM164mil for the first nine months thisyear while EPS amounted to 49.7 sen.

IOIP said that although revenue declined slightly from last year, earningsimproved because higher operating margins were achieved from a highervalue product sales mix.

Compared with the preceding quarter, however, pre-tax profit rose 51% toRM92mil in Q3 due to higher sales launches that included shop-offices.

IOI Oleochemical Industries Bhd (IOI Oleo), another member company,reported a marginal increase in net profit to RM42.2mil in Q3.

Although manufacturing earnings were flattish in the first nine months,the company pointed out that the division "performed creditably despitepersistently high feedstock prices, in particular palm kernel oil."

Operating profit from its plantation division, however, improved 15%against the previous year due mainly to higher FFB output and palm kernelprices.

Its segmental accounts showed that it earned more from its own plantationsthan from the manufacture of oleochemicals. Its plantation division madean operating profit of RM79.4mil in the first nine months of its currentfinancial year compared with RM58.9mil from manufacturing.