24/11/2017 (The Star Online) - KUALA LUMPUR: Felda Global Ventures Holdings Bhd  (FGV) has posted its third straight quarter of rising net profit, as the planter’s turnaround plan by group president and chief executive officer Datuk Zakaria Arshad gained new traction.

Earnings rose to RM38.8mil in the third quarter ended Sept 30.

The improvement was due to higher crude palm oil (CPO) production by about 10%, the company said, supported by a 3% increase in fresh fruit bunch (FFB) production to 3.07 million tonnes.

This was boosted by a rally in the price of CPO during the quarter under review, an increase in the share of profits from its joint ventures and higher margins in the fertiliser business.

“We are encouraged by our strong set of results,” Zakaria said at a media briefing on the group’s results yesterday.

Cumulatively, for the first nine months of financial year 2017 (FY17), FGV posted a significant improvement in its bottom line as it registered a net profit of RM67.15mil.

In the same period last financial year, the group was in the red with a net loss of approximately RM81mil.

Zakaria said the group’s logistics business also recorded increased profits due to the higher throughput and tonnage carried by transport operations in tandem with the increase in the CPO production volume,

The briefing yesterday was Zakaria’s first with the media since he reported back for duty on Oct 16 following a four-month leave of absence.

Moving forward, Zakaria remains optimistic on FGV’s performance both financially and operationally, primarily attributed to an expected improvement in FFB production.

In FY18, the group’s FFB production is anticipated to be higher at 4.85 million tonnes compared to this year.

This is mainly as a result of stronger production of FGV’s younger oil palm trees, given the company’s replanting initiatives in the past few years.

To note, FGV is projected to produce a total of 4.3 million tonnes of FFB this year.

On the flip side, a lower average of CPO price is expected in FY18.

“We expect CPO prices next year to be slightly lower, ranging between RM2,500 and RM2,700. In comparison, the average CPO price for this year hovered around RM2,600 to RM2,800.

“Despite the anticipated lower price of CPO, we are positive on our performance in FY18 as we expect our FFB production to improve significantly.

“Similarly, for the current financial year, it is likely to be a stronger year compared to FY16. Going forward, we remain commited in focusing on our core operations,” stated Zakaria.

He also added that FGV was on the lookout to purchase productive land banks in Kalimantan, Indonesia, as the company aims to increase its total plantation size.

However, the move is still preliminary, he said.

Zakaria also responded to questions on India’s latest move to raise import taxes on edible oil, saying that only a minimal impact is expected on FGV’s operations.

The country recently raised the import tax on CPO from 15% to 30%, and lifted the import tax duty on refined palm oil imports to 40% from 25%.

“India’s move to raise the import taxes on CPO and related products will only have a minimal and short-term impact on FGV.

“This is largely because only 10% to 15% of our total palm oil products are exported to India on average, which amounts to about 360,000 tonnes per year,” he said.