Going downstream: The proposed acquisition of Zhong Ling Nutri-Oil is in line with FGVHB
KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) posted earnings of RM110.59mil in the fourth quarter of 2016 (Q4FY16), which pushed the FY16 into the black.
The world's largest CPO producer announced on Tuesday, the earnings were down 21.4% from the RM140.70mil a year ago. Earnings per share were three sen per share compared with 3.9 sen a year ago.
FGV posted a profit before tax of RM219.63mil in Q4FY16 compared to RM3.03mil in the third quarter ended Sept 30, 2016 as a result of fair value gain in the land lease agreement (LLA) of RM139mil compared to fair value charge of RM105.32mil in previous quarter.
Recall that under the LLA signed in 2012, FGV has to pay Felda a fixed amount of RM250mil per year in cash for 20 years and a 15% share of operating profit from the sales of fresh fruit bunches derived from the estate land leased from Felda.
“Impact of the change in accounting policy was also higher at RM56.99mil compared to RM25.96mil in preceding quarter due to higher replanting expenses was capitalised in current quarter under Palm Upstream segment,” it said.
FGV said also part of the total stock losses of RM36.82mil included in share of losses from jointly controlled entity in Q3FY16 was reversed and accounted for as prior year adjustments after taken into consideration the results from the forensic report carried out by professional audit.
For FY16, its earnings were at RM29.61mil compared with RM188.79mil in FY15. Its revenue rose 11.1% to RM17.28bil from RM15.56bil.
“The group posted a lower profit before taxation of RM265.96mil in 2016 compared to RM460.15mil in FY15 largely due to lower CPO production, higher raw sugar costs, impairment losses incurred in palm upstream and palm downstream segments and losses suffered by jointly controlled entity.
“The lower profit was mitigated by lower fair value charge in LLA of RM68.28mil compared to RM224.86mil in 2015,” it said.
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