KUALA LUMPUR: FGV Holdings Bhd returned to positive territory for the fourth quarter ended Dec 31, posting a net profit of RM75.8 million, from a net loss of RM209.2 million in the previous corresponding quarter due to improved crude palm oil (CPO) margins, and significantly reduced operating costs as a result of tighter controls and improved efficiencies across the group.
Revenue, however, declined 2.4% to RM3.15 billion, from RM3.23 billion previously, due largely to lower yields, which is in line with the national average, as a result of the lag effect from prolonged dry weather and lower rainfall in late 2018 and early 2019.
For the quarter, the group recorded lower impairment losses amounting to RM17 million, as compared to RM151 million in 4Q2018.
CPO prices were recognised at RM2,159 per metric tonne (MT), compared to RM2,055 per MT before.
FGV declared a final dividend payment of 2 sen per share for FY19 ended Dec 31, which is expected to be paid by mid-July 2020.
FGV group CEO Datuk Haris Fadzilah Hassan said he was pleased to report an improvement in the group’s earnings on the back of its aggressive transformation programme.
“We reached far into the core of the group to effect change at every level. Our intention is to institutionalise this change, to protect and enhance the interests of the owners of this company, now and in the future,” he said.
For the full year, the group posted a narrowed net loss of RM242.2 million, from RM1.08 billion recorded a year before, while revenue stood 1.5% lower at RM13.3 billion, from RM13.5 billion previously.
CPO prices for FY19 were realised at RM2,021 per MT, down 11% compared to RM2,282 per MT in FY2018 due to improved full-year CPO ex-mill costs which averaged at RM1,503 per MT compared to RM1,800 per MT in FY2018.
Group-wide cost rationalisation and improved procurement processes resulted in savings of approximately RM170 million for the full year, FGV noted.
Moving forward, Haris said FGV’s plans to diversify its revenue streams is well underway., with the group expecting to see additional revenues of RM45 million from its integrated farming, renewable energy and animal feed businesses in FY20.
“While palm oil will remain our mainstay, this is an exciting diversification that will bring us and our smallholder partners added revenue and opportunities for growth,” Haris said.
