Lower CPO prices drag bottom-line down in Q2
KUALA LUMPUR: FGV Holdings Bhd recorded a net loss of RM23.23 million in the secondquarter ended June 30 this year from a net profit of RM37.26 million in the same period a year ago, due to weak contribution from plantation division.
The loss was primarily dragged by lower average crude palm oil (CPO) prices of RM2,477 a tonne compared with RM2,916 last year.
Revenue for the quarter declined 18.29 per cent to RM3.44 billion from RM4.21 billion due to lower productivity, higher production costs and higher share of loss from joint ventures and associate companies.
The company, in a statement yesterday, said CPO sales volume was 480,738 tonnes, 14.18 per cent higher in this quarter compared with 421,045 tonnes in the previous corresponding quarter.
Fresh fruit bunch (FFB) production was marginally lower at 993,505 tonnes compared with the previous 1.04 million tonnes.
For the first half of this year, FGV posted a net loss of RM21.90 million from a net profit of RM38.96 million in the same period a year ago, while revenue plunged 17.47 per cent to RM7.04 billion from RM8.53 billion.
FGV’s board has acknowledged that further steps need to be taken by the management to enhance operational effectiveness and efficiencies in light with the changing market conditions.
“We anticipate a challenging year for the company, given the bearish CPO price outlook, operational inefficiencies and unrealised returns from investments,” it said.
FGV said it has embarked on a group transformation programme, which is expected to reverse positively and overcome challenges faced by the group.