PETALING JAYA: IOI Corp Bhd

expects crude palm oil (CPO) prices to be supported by strong buying interest and a discount of CPO price against the US soy oil price.

On the other hand, the group also noted the ongoing high fresh fruit bunches (FFB) production cycle which is expected to persist over the next few months, is likely to result in CPO stock rising gradually into the fourth quarter of 2025.

For the fourth quarter ended June 30, 2025 (4Q25), the group’s net profit increased by 26% year-on-year (y-o-y) to RM436.5mil or earnings per share of 7.04 sen.

Revenue was up by 17% y-o-y to RM2.96bil. The better performance was mainly due to a higher contribution from the plantation segment, partially offset by a lower contribution from the resource-based manufacturing segment.

For the full financial year 2025, IOI Corp’s net profit gained 37% y-o-y to RM1.52bil, while revenue rose by 18% y-o-y to RM11.33bil.

In a filing with Bursa Malaysia, the group’s plantation segment profit for 4Q25 of RM397.8mil was 27% higher y-o-y. Excluding the fair value loss on biological assets and derivative financial instruments of RM13.7mil (4Q24 – gain of RM6mil) and impairment loss on plasma receivables and property, plant and equipment of RM2.8mil (4Q24 – reversal of RM10.7mil), the segment reported an underlying profit of RM414.3mil for 4Q25 which was 39% higher y-o-y mainly due to higher FFB production, higher CPO and palm kernel (PK) prices realised, as well as higher share of associates results.

As for the resource-based manufacturing division, profit for 4Q25 was RM9.1mil as compared with the profit of RM142.2mil for 4Q24.

Excluding the fair value gain on derivative financial instruments of RM52.6mil (4Q24 – RM61.9mil) and impairment loss on property, plant and equipment of RM39.2mil (4Q24 – nil), this segment reported an underlying loss of RM4.3mil for 4Q25 which was 105% lower y-o-y due mainly to lower contribution from refinery sub-segment with lower margin, lower sales volume from oleochemical sub-segment as well as lower share of associate results.

Looking ahead, IOI Corp projects FFB production in FY26 to be higher than in FY25, primarily driven by a larger portion of our palms reaching prime age and young palms coming into maturity, despite the ongoing accelerated replanting programme in the Sabah region.

“In addition, our continuous efforts to enhance estate management efficiencies through mechanisation and digitalisation are expected to further support productivity gains. Coupled with the firm CPO price, we expect the plantation segment to deliver a good financial result for FY26,” the group said.

Moreover, IOI Corp cautioned that the outlook for the refinery and commodity marketing sub-segment remains challenging, mainly due to intense competition from Indonesian refiners who benefit from the raw material price advantage under the country’s CPO export duty policy.

On a positive note, however, the group said the recent US tariffs on Malaysian palm oil are expected to have minimal impact, given the company’s low export of palm oil to the US market.

“Against this backdrop, our competitive advantage in producing low contaminant oils as well as the continuation of our operation efficiency initiatives will be key to maintaining a satisfactory financial performance,” IOI Corp said.

Further, the operating environment for its oleochemical sub-segment is also expected to remain challenging, as US trade tariffs and ongoing geopolitical tensions will continue to influence global trade flows and purchasing patterns.

“Industry overcapacity and high raw material price remain headwinds, exerting pressure on both sales volume and profit margins,” the group noted.

Meanwhile, IOI Corp said the implementation of the EU Deforestation Regulation now scheduled for December 2025 may disrupt trade flows into Europe but could also create opportunities for certified sustainable producers like the group.

As for the specialty fats sub-segment, represented by IOI Corp’s associate company Bunge Loders Croklaan (BLC), sales margins particularly for cocoa butter equivalents are expected to remain good, although the sales margin in BLC’s US operations may be affected by the additional tariffs on imports of palm raw material. Overall, the company anticipates the sub-segment’s performance to remain satisfactory.

IOI Corp said while FY26 presents a dynamic and evolving landscape, it remains confident in its ability to navigate the market volatilities.