FGV shares were actively traded since early trade yesterday. Price went from a low of RM1.93 to a high of RM2.18 before closing 18 sen or 9.42% higher at RM2.09. FGV is the world
KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) posted earnings of RM2.5mil in the first quarter ended March 31, 2017, which was in contrast with net losses of RM81mil a year ago.
FGV said on Wednesday its revenue rose 15% to RM4.32bil from RM3.75bil a year ago.
It said the higher revenue was due to higher income from the plantation, logistics and others and sugar sectors by 11%, 57% and 17% respectively versus a year ago.
FGV group president and CEO Datuk Zakaria Arshad said FGV's higher revenue in Q1 FY17 due to better performances of its upstream operations recording a 16% on-year increase in crude palm oil (CPO) production resulting in lower production cost (ex-mill) by 5% to RM1,739 per tonne.
“Also noteworthy is that we lowered our administrative expenses by RM39.2mil, a 15% reduction compared to the same period in 2016,” he said.
However, the group’s improved performance was offset by a few factors mainly higher raw sugar prices of RM2,697 per tonne (RM2,139 in 2016); impairment of receivables and provision for litigation loss on a vessel arrest amounting to RM29.61mil and RM32.79mil respectively.
There was also a lower share of results from joint ventures due to higher unrealised foreign exchange gain recorded a year ago.
The plantation sector's revenue rose to RM3.27bil in Q1 2017 from RM2.94bil a year ago and a lower loss of RM900,00 versus RM82.2mil last year.
Within the sector, the palm upstream cluster posted RM65.8mil profit versus losses of RM96.8mil a year ago.
FGV said the turnaround of the palm upstream was due to higher average CPO price realised of RM3,061 per tonne compared with RM2,303 a year ago.
Its logistics and others sector posted a profit of RM9.75mil compared with a loss of RM11.29mil a year ago. The better performance was mainly due to higher tonnage carried by the group’s transport operations, in tandem with the increase in CPO production volumes.
FGV's sugar sector posted a loss of RM23.16mil compared with RM61.60mil profit a year ago. The main factors for the losses were higher raw sugar material cost and the weakening ringgit, despite improved government-approved selling price and higher domestic sales volume.
Zakaria expects average CPO price to slightly decline with the increase in FFB output from both Malaysia and Indonesia in the coming months.
“Nonetheless, Malaysia’s overall production this year is estimated to be lower than 2015, in view of acute labour shortages that could moderate the bearish CPO price outlook.
“FGV remains focused on further augmenting its core business and operational efficiency in line with our SP20 target. We expect average CPO price to be around RM2,550 to RM2,750 a tonne for the second half 2017.
“On the downstream business, we shall continue to develop key destination markets such as India, China and the Middle East and North Africa (MENA).
"We will always be receptive to any strategic partnership proposal that is commercially synergistic and value accretive to our shareholders.,” it said.
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