KUALA LUMPUR: FGV Holdings Bhd recorded its highest positive financial performance in five years as its earnings were boosted by strong crude palm oil (CPO) prices which saw its revenue climb to RM4bil in the fourth quarter ended Dec 31,2020 (Q4 FY20).
FGV said profit before zakat and tax (PBZT) jumped by over 600% to RM326mil compared with RM46mil a year ago, noting that CPO price averaged RM3,059 per tonne (MT) in Q4 FY20 compared with RM2,159 a year ago.
This saw its revenue increase by 27% to RM4bil from RM3.15bil. Earnings per share were 3.7 sen compared with two sen. It declared a dividend of three sen a share.
FGV group CEO Datuk Haris Fadzilah Hassan described Q4 as “the highest positive financial performance in five years for FGV, despite various challenges faced by the group and the palm oil industry in 2020”.
He said the pandemic outbreak affected domestic and global demand, and was further aggravated by disruption in upstream activities such as harvesting and collecting fresh fruit bunches (FFB) due to the Movement Control Order.
For FY20, FGV staged a turnaround with PBZT of RM353 million, compared to a loss before zakat and tax of RM338mil in FY2019. Net profit was RM150.02mil compared with net loss of RM246.17mil.
Its revenue increased by 6% to RM14.08bil from RM13.26bil in FY19. Average CPO price realised for FY20 increased by 32% to RM2,675 compared to RM2,021 in FY19.
Elaborating on the Q4 results, FGV said the plantation sector recorded PBZT of RM474mil, compared with RM72mil a year ago.
The factors for the higher PBZT were due to improved CPO margin in tandem with higher CPO price realised, better CPO sales volume, improved oil extraction rate (OER) and lower ex-mill production cost.
In the upstream segment, FFB production increased by 3% to 1.04 million tonnes compared to 1.01 million tonnes in 4Q FY2019. This was primarily due to improved crop recovery and higher mature hectarage.
Despite a 1.5% increase in CPO production from 0.68 million tonnes in 4Q FY2019 to 0.69 million tonnes in Q4 FY2020 resulting from increased FFB processed, there was a slight improvement in the OER due to better FFB quality and process efficiency.
Meanwhile, mill utilisation factor (UF) remained at 66%. As a result of reduction in estate cost and higher OER, CPO cost ex-mill decreased marginally by 2% to RM1,699 per tonne, compared to RM1,731 per tonne in Q4 FY2019.
The group’s downstream segment registered a higher PBZT of RM91mil, compared to RM3mil in Q4 FY2019.
This positive impact was due to better margin realised from crude palm kernel oil (CPKO)/ palm kernel expeller (PKE) sales in bullish market trend at lower cost on cost of goods sold and gain from the divestment of FGVCambridge Nanosystems Ltd (FGV CNS) at completion, of RM32mil.
The sugar sector under MSM Malaysia Holdings Bhd recorded PBZT of RM77mil in Q4 FY2020, compared to a loss of RM40mil in Q4 FY2019.
This was primarily contributed by higher sales volume especially for the export market, lower raw sugar usage cost, better utilisation factor and reduced refining cost.