FGV records net loss of RM849.26 million in third quarter
KUALA LUMPUR: FGV Holdings Bhd (FGV) posted a net loss of RM849.26 million in the third quarter (Q3) ended Sept 30, 2018 compared with a net profit of RM41.53 million recorded in the corresponding period last year.
Revenue fell to RM3.19 billion from RM4.14 billion previously, the plantation company said in a filing to Bursa Malaysia.
Loss per share was at 23.30 sen against earnings per share of 1.10 sen before.
“When compared with the preceding quarter, group revenue was lower by 7.1 per cent to RM3.19 billion.
“It also incurred a significant loss before zakat and taxation of RM911.15 million in the current quarter under review mainly attributed to losses incurred in the plantation sector, which was associated with lower average crude palm oil (CPO) price realised and higher share of loss from jointventures,” it said.
FGV noted that the plantation sector incurred a loss of RM838.02 million in 3Q18 compared with a profit of RM339.61 million in 3Q17.
Operationally, the sector was significantly affected by the drop in average CPO price realised, from RM2,820 per tonne to RM2,371 per tonne in 2018, weak margins in research and development and kernel crushing and refining business, coupled with lower sales volume in the fertiliser business.
Fresh fruit bunches production weakened marginally by 0.4 per cent to 3.06 million tonnes in 2018 while yield remained flat at 11.13 tonnes per hectare.
Asforthesugarsector,ithowever registered an improvement, from a loss of RM25.96 million in Q3 2017 to a profit of RM71.47 million in 3Q18.
Despite lower sales volume and average selling prices, the lower revenue was compensated by lower raw sugar material costs and favourable foreign exchange rate.
On the logistics and support businesses, the results in this sector improved to a profit of RM25.14 million in the quarter under review compared with a loss of RM40.94 million in the same period last year, mainly attributable to higher handling rate in logistics business and increase in rate of security services provided by the support business.
“The CPO price trend in 2018 has been subject to fluctuations with a decline in 3Q and the outlook is bearish. The downward price trend is expected to continue into the early part of next year,” it said.
FGV acknowledged that the lower CPO price would have a major impact on the group’s performance.
Nevertheless, it is committed to its turnaround plan and transformation initiatives to achieve further cost reduction sand uplift productivity. — Bernama