Zakaria: FGV in early talks to buy sizeable land in Kalimantan
KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) is in preliminary talks to buy sizeable oil palm land in Kalimantan, said FGV group president and chief executive officer Datuk Zakaria Arshad.
“We are keen to acquire oil palm land in Kalimantan. The negotiation with the seller is still in early stages, so we cannot give details except that the land is quite sizeable and would involve a few hundred millions of ringgit,” he said at a briefing, here, yesterday.
On how FGV would fund this purchase, Zakaria said: “We have the money, don’t worry. We can resort to bank borrowings. FGV has good credit.”
On next year’s outlook, he expects a further rise in oil palm fruit harvest to 4.85 million tonnes from this year’s estimated 4.3 million tonnes.
He also expects palm oil to trade between RM2,500 and RM2,700 per tonne by the first half of next year.
“Prices are likely to drop a little next year as global soya oil and palm oil output recover.”
FGV posted a net profit of RM38.77 million in the third quarter ended September 30, compared with a net loss of RM73.61 million a year ago.
This was contributed mainly by a strong performance from sugar, and logistics and others sectors.
Third-quarter revenue slipped marginally by one per cent to RM4.15 billion from RM4.19 billion. For the nine-month period, FGV recorded a net profit of RM67.15 million from a net loss of RM80.99 million previously. Revenue rose five per cent to RM12.69 billion from RM12.09 billion.
Zakaria said the plantation segment posted a marked improvement by achieving a RM255 million profit in the nine months against a loss of RM30 million in the same period last year.
He said based on the significant improvement of its fresh fruit bunches production last month, FGV expects to perform better at the close of the financial year 2017.
FGV declared an interim dividend of five sen per share on 3.65 billion ordinary shares under a single-tier system for third quarter amounting to RM182.41 million. The dividend will be paid by December 28.
On the impact of the wet weather on FGV’s business, plantation sector chief operating officer Palaniappan Swaminathan said it is not serious.
“We don’t expect a serious La Nina phenomenon. Even if there is, it’s not as bad as the El Nino. The heavy rainfall, which causes floods in some areas, is usually for a short period.”
Malaysia is currently experiencing heavy rainfall daily. In some low lying areas, there is flooding and planters face difficulties when harvesting oil palm fruits. Ooi Tee Ching