FGV net profit for FY23 falls to RM103 mln on weaker CPO prices
KUALA LUMPUR: FGV Holdings Bhd’s net profit for the financial year ended Dec 31, 2023 (FY23) fell to RM103 million against RM1.33 billion in FY22 due to a drop in plantation profit.
The plantation business’ profit before zakat and taxation fell from RM2.12 billion to RM294.82 million, which the company attributed mainly to a weaker average crude palm oil (CPO) price realised as well as a 29 per cent rise in CPO production costs ex-mill.
Total revenue also dropped to RM19.36 billion versus RM25.56 billion, it said in a filing with Bursa Malaysia on Tuesday.
FGV declared a final dividend of three sen per share compared to 11 sen a year earlier. This was the only dividend declared for the year while the total dividend for FY2022 was 15 sen.
The company said average CPO price declined to RM3,901 per tonne from RM4,832 in the previous financial year.
However, this was partially offset by improvements in logistics and others sector and a reduced loss in the sugar segment, it said.
For the fourth quarter ended December 31, 2023, net profit shrank 79 per cent to RM71.82 million from RM344.29 million, which was partially mitigated by enhanced performance in the logistics and others sector, coupled with improvements in the sugar business during the quarter.
Revenue fell 12 per cent to RM5.36 billion against RM6.10 billion.
On its prospects, the company said the global palm oil supply for the export market is anticipated to be affected by the implementation of the B35 biodiesel mandate in Indonesia, weak demand from major importing countries, and price competition from rapeseed and sunflower oils.
This is expected to influence CPO prices, which are forecast to range between RM3,900 and RM4,200 per tonne.
Meanwhile, the company said its sugar sector continuously seeks opportunities to improve product offerings while engaging with the government to finalise a sustainable pricing mechanism for the domestic retail segment to ensure food security.
The introduction of new premium white sugar in the market is also expected to contribute significantly to the company, it said.
For the logistics sector, FGV said it will continue to explore market expansion opportunities by expanding its bulking capacity and managing a higher volume of high-value products, including premium products and renewable energy.