CIMB Securities sees IOI Corp notching RM280m -RM320m in 1QFY2025 core profit

KUALA LUMPUR (Nov 14): IOI Corporation Bhd (KL:IOICORP) is expected to post a core net profit of between RM280 million and RM320 million for 1QFY2025, up from RM242 million in 4QFY2024, said CIMB Securities.

The research house said this after the quarterly results announcement of its 32%-owned associate Bumitama Agri (BAL), which contributed around RM205.6 million or 19% to IOI Corp's FY2024 core net profit of RM1.09 billion.

In a note on Thursday, CIMB Securities attributed the strong forecast to higher output, stronger palm kernel prices and increased downstream profits.

IOI Corp’s 1QFY2025’s earnings are expected to account for roughly 21% to 25% of CIMB Securities full-year profit forecasts.

“1Q2024 would make up around 21%-25% of our full-year forecasts. Reported net profit may be higher owing to a positive forex translation gain of around RM380m on US dollar loans from a stronger ringgit of RM4.1/US$1 as at end-Sept 2024 versus RM4.72/US$1 as at end-Jun 2024,” CIMB Securities said.

On broader financial projections, the research house estimates IOI Corp’s revenue to reach RM11.05 billion for FY2025, up from RM9.60 billion in FY2024.

Its forecast for core net profit stands at RM1.30 billion, translating to earnings per share of 21 sen, which marks a 19.5% growth from FY2024.

“Key re-rating catalysts include rising crude palm oil (CPO) prices and increased downstream earnings,” it added, prompting the research house to maintain its “buy” call with an unchanged target price (TP) of RM4.38.

“Our current IOI Corp SOP valuation for BAL stands at RM1,057m, below its market cap value of RM1,533 million, implying an 8.5 sen upside if valued at its latest market cap,” the note said.

At time of writing, IOI Corp’s share price was down two sen or 0.50% at RM3.98, valuing the company at RM25.02 billion.