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New Straits Times
4 days ago
- Business
- New Straits Times
IOI Corp's FFB growth target maintained at 2.5pct for FY2025
KUALA LUMPUR: IOI Corporation Bhd is maintaining its fresh fruit bunch (FFB) output growth target at 2.5 per cent for the financial year 2025 (FY25), said Hong Leong Investment Bank Bhd (HLIB Research). According to the bank, FFB production has rebounded both month-on-month and year-on-year since March 2025, supported by favourable weather conditions. "The output recovery has helped to narrow the group's year-to-date (YTD) FFB output decline to just 0.3 per cent for the first ten months of FY25. "Management indicated that the recovery trend is likely to continue in the coming months, potentially allowing IOI Corp to exceed its initial FY25 FFB output growth guidance of one to two per cent. "As such, we maintain our FY25 FFB output growth assumption of 2.5 per cent," it said in a note. Meanwhile, HLIB Research noted that several factors, including lower FFB output, the minimum wage hike effective February 2025, and a higher windfall profit levy, contributed to a 1.3 per cent YoY increase in IOI Corp's crude palm oil (CPO) production cost for the third quarter of FY25 (3Q25), raising it to RM2,530 per metric tonne. This brought the average CPO production cost for the first nine months of FY25 to RM2,104 per metric tonne, representing a 1.5 per cent decline compared to the same period last year. Given the anticipated strong FFB output in 4Q25, the firm said management remains confident in keeping the full-year CPO production cost below RM2,100 per metric tonne. Furthermore, HLIB Research said IOI Corp's decent performance in the manufacturing segment is expected to be sustained into 4Q25, if not improved further. It added that earnings at the manufacturing segment improved QoQ in 3Q25, with a profit of RM81.4 million, primarily driven by margin expansion at the refinery sub-segment, which more than mitigated weakness at the oleochemical and speciality fats sub-segments. "Management shared that earnings at the manufacturing segment should at least track 3Q25's performance (if not better), supported by sustained performance at the refining sub-segment arising from stable margins and improving availability of feedstock. "This includes gradual demand recovery for oleochemical products, albeit input prices remained elevated, as well as an improving contribution from the speciality fats sub-segment (as production normalised from the loss of production)," it said. On that note, HLIB Research also highlighted that IOI Corp's accelerated replanting programme, covering 8,000 to 9,000 hectares per annum since FY19, will continue into FY26. This is expected to reduce the group's average age profile to approximately 13 years by the end of FY26. The firm also noted that construction of the zero-waste paper pulp plant, undertaken through Nextgreen IOI Pulp Sdn Bhd (NIP), a 45 per cent owned joint venture unit of IOI Corp, is scheduled to begin in the first half of 2026 (1H26), with completion targeted by the end of 2027. Upon completion, it said the facility will have an initial annual production capacity of 150,000 metric tonnes of chemical bleached pulp.
The Sun
26-05-2025
- Business
- The Sun
Kobay Technology eyes growth in contract manufacturing, advanced technologies
GEORGETOWN: Main market-listed leading engineering solutions provider, Kobay Technology Bhd's net profit decreased 87.14% to RM705,000 for the third quarter (Q3 ended March 31, 2025 (FY25) from RM5.48 million posted in the same quarter last year due to intensified pricing competition and changes in the overall product mix. Revenue for the quarter stood at RM81.4 million compared to RM87.8 million posted in Q3 FY24 due to a shift in sales towards a lower-margin product mix and subdued market demand for higher-margin products during the quarter. For the nine-month (9M) period, Kobay recorded an 8.2% year-on-year (YoY) increase in revenue, reaching RM257.3 million compared to RM237.8 million in the 9M of FY24. The growth was primarily driven by commendable growth in the manufacturing segment, which saw a 10.9% YoY rise in revenue to RM164.2 million in 9M FY25, up from RM148.1 million in 9M FY24. Higher sales orders across the core mainly propelled this improvement in manufacturing business units, though this was partially offset by a softer demand for higher-margin products and the incubating project, which contributed substantially, resulting in a lower margin recorded. Profit before tax (PBT) for the manufacturing segment rose by 2.7% YoY to RM11.7 million, versus RM11.4 million in 9M FY24. Reflecting the top-line performance, the group's net profit for 9M FY25 saw a modest climb of 0.9% YoY to RM10.2 million vis-à-vis RM10.1 million in 9M FY24. Managing Director and CEO Datuk Seri Koay Hean Eng said the company's 9M FY25 results highlight the group's resilience amid a challenging and volatile operating environment, characterised by tariffs, export controls, and supply chain restrictions that continue to affect the global economy. He said this policy uncertainty complicates investment and manufacturing decisions, potentially impacting long-term capacity planning. On a brighter note, Koay said the global semiconductor industry continues to show vitality, with the Semiconductor Industry Association (SIA) reporting an 18.8% YoY increase in global semiconductor sales to US$167.7 billion in the first quarter of 2025. The World Semiconductor Trade Statistics (WSTS) also projects the industry to reach approximately US$697 billion this year, an 11.2% surge. 'Against this backdrop, the group is actively advancing its diversification efforts into the contract manufacturing (CM) services as part of our broader strategic approach to adapt to market conditions. 'These efforts, combined with investments in advanced manufacturing technologies, are expected to drive long-term growth and stabilise performance on a YoY basis. 'Alongside these efforts, we remain optimistic about the prospects of our property development division. This outlook is fuelled by ongoing infrastructure projects, government initiatives, and a revival in tourism activity, all expected to bolster property markets in key locations such as Langkawi and Penang. 'Moving forward, we intend to time upcoming product launches to align with evolving buyer trends while exercising prudent risk management and maintaining operational discipline. 'Our pharmaceutical and healthcare division expects steady demand in the future, supported by growing health awareness, preventive care trends, and demographic changes such as an ageing population. 'Nevertheless, inflation and rising living costs may weigh on consumer appetite soon. To navigate this, we are expanding our product range, exploring new market segments such as high-margin niche medical products, improving operational efficiency, and strengthening our digital marketing efforts to enhance brand presence. 'As we progress, we will prioritise agility and responsiveness as essential for navigating an increasingly complex and dynamic market landscape. By remaining adaptable and proactive, we aim to manage challenges effectively while building sustainable growth over time,' Koay said.
The Sun
26-05-2025
- Business
- The Sun
SunBiz 26-05- 2025 04:58 PM
GEORGETOWN: Main market-listed leading engineering solutions provider, Kobay Technology Bhd's net profit decreased 87.14% to RM705,000 for the third quarter (Q3 ended March 31, 2025 (FY25) from RM5.48 million posted in the same quarter last year due to intensified pricing competition and changes in the overall product mix. Revenue for the quarter stood at RM81.4 million compared to RM87.8 million posted in Q3 FY24 due to a shift in sales towards a lower-margin product mix and subdued market demand for higher-margin products during the quarter. For the nine-month (9M) period, Kobay recorded an 8.2% year-on-year (YoY) increase in revenue, reaching RM257.3 million compared to RM237.8 million in the 9M of FY24. The growth was primarily driven by commendable growth in the manufacturing segment, which saw a 10.9% YoY rise in revenue to RM164.2 million in 9M FY25, up from RM148.1 million in 9M FY24. Higher sales orders across the core mainly propelled this improvement in manufacturing business units, though this was partially offset by a softer demand for higher-margin products and the incubating project, which contributed substantially, resulting in a lower margin recorded. Profit before tax (PBT) for the manufacturing segment rose by 2.7% YoY to RM11.7 million, versus RM11.4 million in 9M FY24. Reflecting the top-line performance, the group's net profit for 9M FY25 saw a modest climb of 0.9% YoY to RM10.2 million vis-à-vis RM10.1 million in 9M FY24. Managing Director and CEO Datuk Seri Koay Hean Eng said the company's 9M FY25 results highlight the group's resilience amid a challenging and volatile operating environment, characterised by tariffs, export controls, and supply chain restrictions that continue to affect the global economy. He said this policy uncertainty complicates investment and manufacturing decisions, potentially impacting long-term capacity planning. On a brighter note, Koay said the global semiconductor industry continues to show vitality, with the Semiconductor Industry Association (SIA) reporting an 18.8% YoY increase in global semiconductor sales to US$167.7 billion in the first quarter of 2025. The World Semiconductor Trade Statistics (WSTS) also projects the industry to reach approximately US$697 billion this year, an 11.2% surge. 'Against this backdrop, the group is actively advancing its diversification efforts into the contract manufacturing (CM) services as part of our broader strategic approach to adapt to market conditions. 'These efforts, combined with investments in advanced manufacturing technologies, are expected to drive long-term growth and stabilise performance on a YoY basis. 'Alongside these efforts, we remain optimistic about the prospects of our property development division. This outlook is fuelled by ongoing infrastructure projects, government initiatives, and a revival in tourism activity, all expected to bolster property markets in key locations such as Langkawi and Penang. 'Moving forward, we intend to time upcoming product launches to align with evolving buyer trends while exercising prudent risk management and maintaining operational discipline. 'Our pharmaceutical and healthcare division expects steady demand in the future, supported by growing health awareness, preventive care trends, and demographic changes such as an ageing population. 'Nevertheless, inflation and rising living costs may weigh on consumer appetite soon. To navigate this, we are expanding our product range, exploring new market segments such as high-margin niche medical products, improving operational efficiency, and strengthening our digital marketing efforts to enhance brand presence. 'As we progress, we will prioritise agility and responsiveness as essential for navigating an increasingly complex and dynamic market landscape. By remaining adaptable and proactive, we aim to manage challenges effectively while building sustainable growth over time,' Koay said. With investments in advanced manufacturing technologies, Kobay Technology is expected to drive long-term growth and stabilise performance on a YoY basis.
