FGV reports sharp drop in Q2 profit

KUALA LUMPUR, Aug 28 — FGV Holdings Bhd’s net profit shrank to RM1.13 million for the second quarter ended June 30, 2018, from RM39.72 million achieved in the corresponding period last year.

The plantation sector recorded a loss of RM6.53 million, a steep decline from a profit of RM159.88 million a year earlier, the agribusiness firm said in a filing with Bursa Malaysia.

“The poor performance was attributable, among others, to lower productivity which missed targets, lower average crude palm oil (CPO) price realised, higher production costs and higher share of losses from joint ventures and associate companies,” it explained.

Its basic earnings per share fell to -0.64 sen from 1.02 sen a year earlier.

The group also reported an 18.4 per cent year-on-year drop in revenue for the quarter to RM3.44 billion.

FGV said its board acknowledged that the management needed to take steps to enhance operational effectiveness and efficiencies, which was evident when comparing its performance against that of its peers.

On prospects, the board said it anticipated a challenging year for FGV given the bearish CPO price outlook, operational inefficiencies and unrealised returns from investments.

“As a result, the company has embarked on a group transformation programme that is expected to reverse positively and overcome the challenges faced by the group,” it added. — Bernama

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