FGV group president/chief executive officer Datuk Zakaria Arshad(pic said FPM aimed to market the products to smallholders nationwide and export them to Indonesia.
KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) posted net profit of RM38.77mil in the third quarter ended Sept 30, 2017 – continuing its turnaound to profitability after losses in the previous year – as its planations sector recorded higher fresh furit bunches.
FGV reported on Thursday the earnings were in stark contrast of net losses of RM73.60mil a year ago. It declared an interim dividend of five sen a share amounting tio RM182.41mil to be paid on Dec 28.
Its revenue dipped to RM4.148bil from RM4.191bil a year ago. Earnings per share were 1.1 sen compared with loss per share of two sen.
When compared with the second quarter ended June 30, 2017, its revenue slipped by 1.8%.
However, it posted 31.1% higher profit before zakat and taxation of RM114.33mil compared to RM87.23mil due to an improvement in contribution from both sugar and logistics and others sector in Q3.
“Excluding higher fair value charge of land lease agreement (LLA) in current quarter of RM103.58mil compared to RM23.07mil in preceding quarter, the results of plantation sector had improved,” it said.
Plantation
The plantation sector recorded a lower profit of RM107.13mil in Q3 versus RM148.91mil in Q2. This was mainly due to higher fair value charge in LLA in Q3 of RM103.58mil versus RM23.07mi in Q2.
“Excluding the above effect, the sector’s profit increased by 23% to RM210.71mil from RM171.98mil in Q2,” it said.
FGV said a 14.2% increase in crude palm oil (CPO) sales volume helped offset a decline in average CPO price realised in Q3 of RM2,665 against RM2,796 in Q2.
CPO production was up 18% due to higher fresh fruit bunches (FFB) production of 1.23 million tonnes compared to 1.04 million tonnes in Q2.
Oil extraction rate (OER) improved slighty to 19.78% in Q3 from 19.77% achieved in Q2.
Sugar Sector
Sugar Sector staged a turnaround with profit of RM15.64mi from a loss of RM18.44mil in Q2 due to lower raw sugar material costs. The average raw sugar cost per tonne fell by 11% as the market price of raw sugar declined.
Logistics and Others Sector
The logistics and others sector also staged a turnaround with a profit of RM20.15mi compared to a loss of RM4.31mil in Q2.
The better performance was mainly due to higher throughput and tonnage carried by the logistics sector in line with higher CPO production in current quarter and improved results.
Nine months results
Group president and CEO Datuk Zakaria Arshad said for the nine months FGV recorded earnings of RM67.15mil compared with net losses of RM80.99mil in the previous corresponding period.
Revenue increased by 5% to RM12.69bil from RM12.08bil.
“Profit before zakat and taxation of the group was higher at RM170.31mil compared to RM43.71mil reported last year largely due to higher contribution from plantation sector and logistics and others sector.
“The improvement in profit was partially offset by losses incurred in sugar business as a result of higher raw sugar costs and the weakened ringgit,” it said.
Zakaria said FGV's profit from plantation surged to RM255.13mil, a contrast from a loss of RM30.41mil a year ago.
He attribibuted it to the improvement in profit due to higher crude palm oil (CPO) sales margin on the back of higher average CPO price realised of RM2,820 per mt compared to RM2,458 per tonne realised in 2016. The CPO production cost increased by 0.4% compared to last year.
Operationally, CPO production increased by 10% to 2.13 million tonnes associated with the increase in fresh fruit bunches (FFB) production from 2.97 million tonnes in 2016 to 3.07 million tonnes in 2017. The oil extraction rate was lower at 19.79% compared to 20.66%.
Its fertiliser business posted a better results underpinned by higher margin due to increase in sales volume coupled with increase in average price and gain in foreign exchange compared to loss in foreign exchange in 2016.
“The improvement in profit was also aided by the increase of RM57mil in share of results of joint ventures against share of loss attributable to the fraud losses discovered in Quarter 3 last year in downstream cluster.
“The sector’s result was however partially impacted by the impairment of receivables amounting to RM76.52mil and provision for litigation of RM32.84mil,” it said.
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