KUALA LUMPUR: MIDF Research is neutral on FGV Holdings Bhd
's near-term prospects due to low crude palm oil price and its turnaround strategy that may take some time to see results.
At a briefing yesterday, FGV set a new fresh fruit bunch volume target of 4.65 million tonnes, slightly lower than the previous target of 4.85 million tonnes.
According to MIDF, this lowers FGV's growth target to 9% from 13% previously.
Other targets for FY18 include an oil extraction rate of 20.5%, CPO production of three million tonnes and CPO production cost of RM1,600 per tonne.
FOr its other segments, sugar has turned profitable due to lower raw sugar cost and the strengthened ringgit while the logistics and support business sector earnings also improved due to higher tonnage carried.
"We maintain our assumption of core net loss of RM72.7m for FY18. Things should improve in FY19 with expected FFB volume recovery. The information gathered during the briefing has been factored in," said the research house.
MIDF maintained its neutral rating on the counter with a target price of RM1.54.
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