The world’s largest producer of CPO announced on Friday that profit before tax (PBT) increased by 60% to RM417mil from RM260mil.
FGV group president and CEO Datuk Zakaria Arshad said: “The plantation sector registered a significant improvement with a profit of RM554mil from RM234mil in the previous year.”
The stronger performance, he said, was due to higher fresh fruit bunches (FFB) FB production, better crude palm oil (CPO) sales margins and stronger performance from JV companies.
However, it FY17 revenue however slipped 1.6% to RM16.97bil from RM17.24bil a year ago.
Zakaria said FGV’s CPO production increased by 12% to 2.99 million tonnes in line with the growth in FFB production from 3.91 million tonnes in FY2016 to 4.26 million tonnes in FY2017, while its average age profile improved from 14.9 years to 14.5 years.
As for the LO sector, he said its profit jumped to RM45mil from RM8mil mainly due to higher throughput in its bulking business, and increased tonnage carried by the transport operations in tandem with the increase in CPO production volume.
Its sugar sector posted a smaller profit in 2017 due to higher international raw sugar price and weakened ringgit compared to the previous year.
He pointed out FGV's strategic transformation plan for the plantation business had seen fruitful results.
“We are confident the momentum will continue this year supported by sustainable growth in LO Sector and improvement by Sugar Sector”, he said.
For the year ahead, FGV expects to normalise its labour shortage by mid-2018. This would improve harvesting efficiency and this was expected to increase this year’s FFB production by 9% to 4.85 million tonnes while reducing CPO production ex-mill cost per tonne to RM1,562.
“We will continue to grow our LO Sector business capabilities to generate external opportunities for the droup, including procuring new liquid and dry tankers and external business opportunities from various infrastructure projects.
“For the sugar sector, we have made progress through effective cost management, capital strengthening and rationalising our operations. In addition, our new sugar refinery in Johor will begin operations in 2H 2018 which will increase our sugar refining capacity for export markets,” he said.
In the fourth quarter, its earnings fell 31.9% to RM76.57mil from RM112.45mil. Its revenue fell at a slower pace of 16.9% to RM4.27bil from RM5.15bil.
Earnings per share were 2.1 sen compared with 3.1 sen.
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