FGV turns around in Q4, trims FY19 net loss to RM242.19m

KUALA LUMPUR, Feb 28 ― FGV Holdings Bhd's net loss has narrowed to RM242.19 million for the financial year ended December 31, 2019 (FY19) compared with RM1.08 billion in FY18.

In a filing with Bursa Malaysia, it said revenue fell slightly to RM13.26 billion from RM13.46 billion previously, although average crude palm oil (CPO) price realised in FY19 declined 11 per cent to RM2,021 per tonne compared with RM2,282 per tonne in FY18.

“This is due to improved full-year CPO ex-mill costs which averaged at RM1,503 per tonne compared to RM1,800 per tonne in FY18,” it said.

The board of directors is recommending a final dividend payment of two sen per share for the FY19 and is expected to be paid by mid-July 2020.

For the fourth quarter of FY19 (Q4), FGV recorded a net profit of RM75.79 million compared to a net loss of RM209.16 million in the previous corresponding quarter.

“This was achieved despite a 2.4 per cent decline in revenue to RM3.15 billion for the quarter under review compared to RM3.23 billion previously,” it said.

The decline in revenue in Q4 FY19 was mainly due to lower fresh fruit bunch production of 1.01 million tonnes, down 12 per cent from 1.15 million tonnes in the previous corresponding quarter.

“This decline was mitigated by higher CPO price realised of RM2,159 per tonne compared to RM2,055 per tonne before.

“Oil extraction rate (OER) for the period under review was one per cent lower at 20.53 per cent compared to 20.70 per cent previously,” it said, adding that as a result of lower production volume, ex-mill costs increased marginally by three per cent to RM1,691 per tonne compared to RM1,638 per tonne in Q4 FY18.

Meanwhile, the sugar sector under MSM Malaysia Holdings Bhd registered a loss of RM319.70 million compared to a profit of RM58.71 million in the previous financial year, mainly attributable to lower gross profit, higher finance cost incurred following the modification of certain terms, and provision of RM143 million for impairment of plant and machinery.

FGV group chief executive officer Datuk Haris Fadzilah Hassan said FGV’s plan to diversify its revenue streams is well underway.

In FY20, the group expected additional revenues of RM45 million from its integrated farming, renewable energy and animal feed businesses, he said.

“While palm oil will remain our mainstay, this is an exciting diversification that will bring us and our smallholder partners added revenue and opportunities for growth,” he added. ― Bernama