The rating on IOI Corp. Bhd. reflects the group's favorable plantation resources, its highly competitive cost position, and the synergy between key business segments, given that about 90% of its plantations' sales are to its own downstream facilities. These strengths are, however, tempered by the cyclical nature of IOI's plantation and property businesses, its aggressive approach toward expansion, and shareholder-friendly policies. The global economic downturn weakened IOI's operating performance in the fiscal year ended June 2009. All three key business segments were adversely affected, culminating in overall profit before interest and tax declining 38% compared with that in the fiscal year June 2008. Poor weather conditions and softening crude palm oil (CPO) prices undermined the plantation business, while lower sales
