FGV 1Q net loss narrows to RM35.4m, revenue climbs

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KUALA LUMPUR: FGV Holdings Bhd’s net losses narrowed sharply to RM35.42mil in the first quarter ended March 31,2021 as its revenue increased on higher crude palm oil (CPO) prices.

In its statement to Bursa Malaysia on Friday, it said the net losses were lower compared with RM142.35mil a year ago.

Its profit before zakat and taxation was RM15mil compared with a loss of RM163.05mil a year ago. Its revenue increased to RM3.39bil from RM2.78bil.

FGV said the plantation sector registered a lower loss of RM50.78mil in 1QFY21 versus RM147.27mil a year ago.

“The improvement was largely attributable to higher margin as a result of higher average CPO price realised of RM3,172 per tonne against RM2,669 per tonne registered in previous financial period despite lower CPO sales volume by 16.3%, ” it said.

FGV also said the rubber and palm kernel division reported better margin while share of profit from joint ventures improved to RM2.17mil from a loss of RM7.49mil a year ago.

Fresh fruit bunches (FFB) production increased by 4.3% from 710,000 tonnes to 740,000 tonnes, translating into a higher yield of 2.93 tonne per hectare compared to 2.81 tonne a year ago.

Oil extraction rate (OER) achieved was lower at 20.05% compared to 20.10% a year ago. registered in the previous period.

The improvement was partially offset by higher fair value land lease agreement (LLA) charged of RM143.75mil against RM57.30mil a year ago and fair value loss on derivatives of RM15.14mil compared to a gain of RM57.39mil a year ago.

FGV said its sugar sector staged a turnaround with a profit of RM50.68mil compared with loss of RM27.89mil. It attributed this to improved margin achieved due to better capacity utilisation and lower finance costs.

When compared with the fourth quarter ended Dec 31,2020, it said 1QFY21 revenue dropped by 15.3% to RM3.39bil from RM4.01bil.

It reported lower profit before zakat and taxation of RM15mil compared to RM318.63mil profit in 4QFY20 mainly due to lower contribution from all sectors

In 1QFY21, the plantation sector reported a loss of RM50.78mil compared to RM274.68mil profit in FY4Q20 mainly due to lower FFB production by 28.7% to 740,000 tonnes.

FGV also said there was lower yield of 2.93 tonnes per hectare compared to 4.12 tonnes per hectare in 4QFY20.

OER decreased to 20.05%% in current quarter compared to 20.79% registered in preceding quarter.

“The lower result was partially cushioned by higher average CPO price realised of RM3,172 per tonne compared to RM3,059 per tonne in preceding quarter and better margin in kernel products. Including in preceding quarter was fair value gain on LLA of RM98.46mil (current quarter: fair value charge of RM143.75mil) and gain on disposal of a subsidiary amounting to RM31.5 million.

“The gain was partially offset with the impairment recognition in Asian Plantation Ltd Group of RM137.43mil and rubber plantation assets of RM40.76mil in preceding quarter.

“Sugar sector reported a lower profit of RM50.68mil compared to RM76.20mil in preceding quarter mainly due to lower margin achieved coupled with lower sales volume and higher finance cost in current quarter, ” it said.



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