FGV sees lower Q1 profit on lower CPO prices

PETALING JAYA: Felda Global Ventures Holdings Bhd (FGV), which plans to seek shareholders approval for a name change to FGV Holdings Bhd, reported a 21.9% decline in net profit, mainly due to lower crude palm oil (CPO) prices and higher taxation of RM16 million.

Net profit for the for the first quarter (Q1) ended March 31, 2018 was at RM1.33 million against RM1.7 million in the previous corresponding period. Revenue was down by 16.5% to RM3.6 billion from RM4.32 billion.

The plantation giant said in a filing with the stock exchange that despite improved productivity and higher sales volume, the plantation sector’s profit fell 61.4% to RM18.29 million on the back of lower average CPO price realised of RM2,472 per metric ton (MT) compared with RM3,061 per MT in Q1’2017.

The sugar sector recorded a profit of RM22.01 million in Q1’2018, compared with a loss of RM23.16 million in the previous corresponding quarter, mainly attributable to lower raw material costs, favourable foreign exchange rate and a reduction in administrative expenses.

The logistics and support business sector also returned to the black registering a profit of RM25.36 million in Q1’2018, compared with a loss of RM39.5 million in the previous corresponding quarter, thanks to higher throughput in the bulking business and increased tonnage carried by the group’s transport operations.

FGV group president and CEO Datuk Zakaria Arshad (pix) said the group will continue to push for greater productivity and cost efficiency in every sector.

“We expect to see this improving trend continuing, as we are already seeing the results of efforts to enhance our performance. FGV has recruited sufficient labour to meet its requirements. Also, we have been aggressively replanting to correct our age profile.”

While acknowledging market challenges ahead, the board expects the results of 2018 to be satisfactory.