IOI Corp's Q2 pre-tax profit falls to RM666.6mil

IOI Corporation Bhd's pre-tax profit for the second quarter ended Dec 31, 2012 fell to RM666.6 million from RM766.8 million in the same quarter in 2011.

Revenue declined to RM3.594 billion from RM4.166 billion. IOI said the lower pre-tax profit was mainly due to lower profit contribution from the plantation segment, mitigated by better performance from the manufacturing segment.

"The plantation segment continues to face challenges on manpower constraints, higher labour costs arising from the implementation of minimum wage and prevailing lower crude palm oil prices," IOI said in a filing to Bursa Malaysia.

However, the plantation sector is expected to still perform well in the medium-term, with resilient demand from the food sector, higher consumption in emerging markets, expected markets and recovery in palm oil prices beginning in the second quarter of this year.

The Malaysian property market outlook remains positive, especially in the landed property segment, it said.

The group is optimistic that its overall performance will be satisfactory despite lower palm oil prices beginning in the fourth quarter of 2012 and the weak global economy.