FGV trims losses to RM31.66 mln, revenue grows 15 per cent
KUALA LUMPUR: Felda Global Ventures Holdings Bhd ( FGV) reported a smaller pre-tax loss of RM31.66 million in the first quarter ended March 31, 2017 compared with a pre-tax loss of RM82.193 million recorded in the same period last year.
Revenue, however, increased 15 per cent to RM4.32 billion from RM3.76 billion achieved previously due to higher income from the plantation, logistics and others, and sugar sectors by 11 per cent, 57 per cent and 17 per cent, respectively, compared with the same period last year, said the company in a statement yesterday.
FGV also posted a profit after tax and minority interest (PATAMI) of RM2.47 million, registering a RM83.5 million improvement, from a loss after tax and minority interest (LATAMI) of RM81 million for the same period last year.
Group president and Chief Executive Officer Datuk Zakaria Arshad said the higher revenue posted by the company this quarter was due to better performances of its upstream operations, which recorded a 16 per cent, year-on-year, increase in crude palm oil (CPO) production resulting in a five per cent reduction in production cost (ex-mill) to RM1,739 per tonne.
“Also noteworthy is that we lowered our administrative expenses by 15 per cent,” he said.
Moving forward, Zakaria expected the average CPO price to slightly decline with the increase in fresh fruit bunches (FFB) output from both Malaysia and Indonesia in the coming months.
Nonetheless, he added Malaysia’s overall production this year was estimated to be lower than 2015, in view of the acute labour shortage that could moderate the bearish CPO price outlook.
FGV remained focused on further augmenting its core business and operational efficiency, he said, adding that average CPO price would hover around RM2,550 per tonne and RM2,750 per tonne for the second half of 2017.
On the downstream business, FGV would continue to develop key destination markets such as India, China and the Middle East and North Africa.
“We will always be receptive to any strategic partnership proposal that is commercially synergistic and value accretive to our shareholders,” said Zakaria.
For the sugar sector, the company would continue to engage with the government and update them on the volatility of the global sugar market and hoped for a favourable outcome.
“While labour shortages are expected to have an impact on the overall Malaysian palm oil industry, FGV remains proactive to secure a sustainable supply of labour for our operations alongside increased mechanisation of estate processes.
“We will continue to be resilient in facing these challenges,” he added.