FGV net 2017 profit rises to RM208 million

KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV)’s net profit rose to RM208.04 million in the financial year ended Dec 31, 2017 from RM66.45 million recorded a year ago.

Revenue, however, declined two per cent to RM16.97 billion from RM17.24 billion, previously, as a result of lower profits accrued from the sugar sector which suffered from higher raw sugar costs, it said in a filing with Bursa Malaysia today.

FGV group president and chief executive officer Datuk Zakaria Arshad said the plantation sector registered a significant improvement with a profit of RM554 million versus RM234 million in 2016 on the back of higher fresh fruit bunches (FFB) production, better crude palm oil (CPO) sales margins and stronger performance from joint-venture companies.

We will continue to grow our LO sector business capabilities to generate external opportunities for the group, including procuring new liquid and dry tankers and explore external business opportunities from various infrastructure projects. Datuk Zakaria Arshad, FGV group president and chief executive officer

CPO production increased 12 per cent to 2.99 million tonne in line with the growth in FFB production from 3.91 million tonnes recorded in FY2016 to 4.26 million tonnes in FY2017, while average age profile improved from 14.9 years to 14.5 years, he added.

Zakaria also said the logistics and others (LO) sector recorded a higher profit of RM45 million compared with RM8 million in the previous year mainly due to higher throughput in bulking business and increased tonnage carried by the transport operations in tandem with the increase in CPO production volume.

Moving forward, FGV was expected to normalise labour shortage by mid-year which would improve harvesting efficiency and increase this year’s FFB production by nine per cent to 4.85 million tonnes while reduce CPO production ex-mill cost to RM1,562 per tonne.

“We will continue to grow our LO sector business capabilities to generate external opportunities for the group, including procuring new liquid and dry tankers and explore external business opportunities from various infrastructure projects.

“For the sugar sector, we have made progress through effective cost management, capital strengthening and rationalising our operations,” Zakaria said, adding that the refinery in Johor, scheduled to begin operations in the second half of the year, will increase sugar refining capacity for export markets.

He said the group’s 2017 full year results improved in line with FGV’s transformation and growth initiatives during the year.

“The transformation and growth enhancing efforts will continue into 2018, where the management expects further positive results to be achieved,” he said.

FGV earnings per share rose to 3.90 sen in 2017 compared with 0.9 sen in 2016. — Bernama

The decline in earnings was mainly due to the higher tax rate of 45 per cent following the expiry of GDEX's pioneer status tax incentive in September 2017. Prior to this, quarterly tax rates were at mid-teen levels.

Moving forward, FGV is expected to normalise labour shortage by mid-year which would improve harvesting efficiency and increase this year's FFB production by nine per cent to 4.85 million tonnes while reduce CPO production ex-mill cost to RM1,562 per...