FGV reduces Q3 net loss to RM262m

FGV Holdings Berhad logo — Courtesy of FGV
FGV Holdings Berhad logo — Courtesy of FGV

KUALA LUMPUR, Nov 28 — FGV Holdings Bhd has reduced its losses to RM262.41 million for the third quarter ended Sept 30, 2019 (Q3 2019), compared with a net loss of RM849.46 million recorded in the same period last year.

Revenue was 11 per cent higher year-on-year (y-o-y) at RM3.55 billion from RM3.19 billion previously.

In a filing with Bursa Malaysia today, the plantation company attributed the net loss to impairments amounting to RM304 million, lower crude palm oil (CPO) price realised for the period and losses in the sugar business.

Meanwhile, it said the higher revenue was due to significantly improved operational performance, resulting in higher yields and lower costs in spite of the decline in CPO price which fell to RM1,983 per metric tonne (MT) from RM2,224 per MT in Q3 2018, as well as the lower average selling price for sugar.

For the quarter under review, the plantation sector recorded a 15 per cent y-o-y increase in fresh fruit bunch (FFB) production to 1.24 million MT from 1.08 million MT previously, while FFB yield increased 19 per cent y-o-y to 5.12 MT per hectare compared with 4.32 MT per hectare previously.

It said with the marginal increase in CPO oil extraction rate, the group’s CPO production increased 21 per cent y-o-y to 832,000 MT from 689,000 MT in Q3 2018.

Improved production volumes, together with enhanced operational efficiencies, resulted in lower ex- mill costs in Q3 2019 at RM1,500 per tonne — 19 per cent lower than RM1,852 previously.

Group chief executive officer Datuk Haris Fadzilah Hassan attributed the improvement in operational numbers to the new agricultural management systems and processes implemented over the last several months.

“While there is still room for more improvement, especially with our mill utilisation factor, I am confident that FGV is on track to achieve the tough targets that have been set by our board,” he added.

Meanwhile, its downstream businesses also performed better in Q3 2019, with gross profit margin for the palm kernel processing business improving to seven per cent y-o-y from two per cent last year.

The sugar sector recorded a loss of RM220 million for the quarter under review, compared with a profit of RM22 million in Q3 2018, primarily due to an impairment of RM145 million for property, plant and equipment.

The sector was also affected by a three per cent and four per cent decrease in the average selling price for MSM Malaysia Holdings Bhd’s domestic and industry segments, respectively.

The logistics sector’s profit, however, increased by 17 per cent to RM21 million from RM18 million in Q3 2018 due to significant improvements in its operations, resulting in an increase in tonnage carried and storage volume which rose by 34 per cent and 35 per cent respectively. — Bernama

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