Eng - IOI Group

management’sdiscussionandanalysisHIGHLIGHTS• Pursuant to our objective of sustaining long term growth, two substantial acquisitions were completed during the year:i Loders Croklaan, a leading specialty fats manufacturer, for RM853.0 million in December 2002; andii “Pamol Plantations” comprising 23,045 hectares of oil palm estate for RM579.9 million in January 2003.• Group pre-tax profit continued its growth trend to achieve RM812.6 million for FY 2003, 43% up from the previous year.• At net earnings level, the Group exceeded the RM500 million level for the first time to make RM502.1 million for FY2003, an increase of 45%.• The sterling set of results was achieved on the back of much higher contribution from the plantation segment as aresult of higher CPO prices and higher production as well as satisfactory performance from the other two corebusinesses, property and resource-based manufacturing.• The performance of the Group would have been even better had it not been for the charges against income of anunrealised foreign exchange translation loss of approximately RM40.1 million and a revaluation deficit of RM14.1million in respect of an investment property in Singapore.• At EBIT level, plantation segment regained the lead position in FY 2003. The contributions, including the results ofassociated companies from the three core segments to Group EBIT were as follows:FY 2003 FY 2002Plantation 63% 39%Properties 29% 43%Manufacturing 14% 17%• The respective contributions of the 3 core segments to net earnings were as follows, with a clear inverserelationship between plantation and manufacturing:IOI Corporation BerhadAnnual Report 200340FY 2003 FY 2002Plantation 85% 46%Properties 26% 34%Manufacturing 1% 17%