KUALA LUMPUR, Nov 28 — The current uptrend in crude palm oil (CPO) price, coupled with improvements in FGV Holdings Bhd’s operational performance will likely drive its financial performance higher.
Group chief executive officer, Datuk Haris Fadzilah Hassan said CPO price for September and October ranged between RM2,150 and RM2,200 per tonne and climbed to RM2,500 per tonne in November amidst lower production and stronger export demand.
“In the fourth quarter this year, we expect CPO price to range between RM2,200-RM2,400 per tonne. Some experts are even forecasting it to go up to RM2,700 per tonne for next year.
“We hope it can stay at this level because this is a breather that all players are looking forward to considering that we have experienced prolonged low prices for the last couple of years,” he told a press conference on FGV’s third quarter ended Sept 30, 2019 (Q3 2019) financial performance here today.
He said the B20 biodiesel roll out announcement during the tabling of Budget 2020 and Indonesia’s plan for B30 biodiesel also impacted the outlook for CPO prices as it would eliminate stockpiles, consequently reducing dependency on other markets in light of negative campaigns against palm oil overseas.
On FGV’s transformation plan, Haris said it was already bearing fruit for the company as evidenced by the significant improvement in operational performance, lifting its revenue 11 per cent higher in Q3 2019.
FGV had also achieved RM129 million in procurement savings through contract renegotiations and it expects these savings to reach up to RM170 million by year-end.
On non-core and non-performing assets disposal, Haris said FGV had to date completed divestment worth RM129 million from the sale of refinery in China and a company called Paragon Yield Sdn Bhd.
“Another RM80 million worth of divestment is currently being processed or negotiated, which we hope will be concluded by the second quarter next year,” he said.
When asked if FGV had seen any impact on its exports to India after the country’s top vegetable oil trade body in October told members to stop buying palm oil from Malaysia, he said there had not been any reduction in exports to the country.
“India is a big market for us. We export about 300,000 metric tonnes a year. We were concerned when the news was reported, but fortunately nothing came of it and we are experiencing business as usual.
“Apart from India, our main export markets are Pakistan and China,” he added. — Bernama