29/08/2012 (The Star) - Felda Global Ventures Holdings Bhd (FGVH) made a net profit of RM188.4mil, or 5.20 sen per share, for its second quarter ended June 30, 32.5% lower than the net profit of RM279.3mil, or 15.80 sen per share, for the same period a year earlier.

The reduced net profit was attributable to lower crude palm oil (CPO) prices.

However, the world's third-largest palm oil operator reported higher sales of RM3.54bil for the quarter compared with RM2.01bil last year.

The board has declared an interim dividend of 5.5 sen per share for the period, to be paid before Nov 28.

“The prospects look good,” Prime Minister Datuk Seri Najib Tun Razak said at a briefing after FGVH's Hari Raya open house yesterday.

On top of the interim dividend just declared, he said shareholders could look forward to a final dividend payout for the current financial year ending Dec 31.

In notes accompanying its results, FGVH said its plantation segment results of RM515.3mil decreased by 56% as compared to last year on the back of a fall in CPO price to RM3,230 per tonne from RM3,461 in 2011.

A 5% reduction in fresh fruit bunch production volume also caused the drop in figure, it said.

While its sugar segment revenue increased largely as a result of higher selling prices of refined sugar products, coupled with an increase in Government subsidy, FGVH's downstream segment was affected by lower gross margins for refined palm products.

This was a result of changes in the Indonesian duty structure, which made Indonesian refined oil cheaper and more favourable compared to local refined oil.

FGVH's profits in the second quarter were also hurt by higher fertiliser cost and an increase in the cost of sales.

Moving forward, FGVH said its plantation segment was expected to perform well in the current financial year on expectations of more resilient CPO prices in the second half and strong demand from its key buyers in China, India and Pakistan.

“The plantation segment will continue with its initiative to improve palm oil trees' age profile in accordance with its replanting policy.

“Barring any unforeseen circumstances, the board is of the opinion that the group's performance for the current financial year ending Dec 31 will be satisfactory,” it said in a filing with the stock exchange.

“We expect the year to end satisfactorily, depending on CPO prices,” FGVH president and group chief executive officer Datuk Sabri Ahmad reiterated at the event yesterday.

Meanwhile, Bloomberg reported that FGVH planned to buy 150,000 hectares of oil palm plantation over the next five years, mainly in Malaysia and South-East Asia.

It has also been reported that the group was in talks to buy 30,000 hectares in Myanmar to grow sugarcane.

For the six months ended June 30, FGVH's net profit stood at RM380.5mil on revenue of RM5.26bil compared with a net profit of RM638.4mil on revenue of RM3.7bil previously.