The Star Online (29/05/2018) - PETALING JAYA: Felda Global Ventures Holdings Bhd image: https://cdn.thestar.com.my/Themes/img/chart.png (FGV) broke even in its first quarter ended March 31 on the improved performance of its sugar and logistics divisions, which offset the impact of weaker crude palm oil (CPO) selling prices.

The world’s third-largest palm plantation operator’s net profit for the quarter stood at RM1.3mil compared to RM1.7mil a year earlier, on the back of a 16.5% or RM713mil drop in revenue.

“The renewed focus on operational improvement to increase productivity is bearing fruit,” said group president and chief executive officer Datuk Zakaria Arshad in a statement.

FGV’s sugar business recorded a profit of RM22.01mil in the quarter, compared with a loss of RM23.16mil in the previous corresponding quarter.

The group attributed the profitability to lower raw material costs, a favourable foreign-exchange rate and a reduction in administrative expenses by 33% quarter-on-quarter.

Its logistics and support businesses recorded a profit of RM25.36mil in the quarter compared with a loss of RM39.50mil a year ago.

Meanwhile, profit from its plantation segment decreased by 61% to RM18.29mil from RM47.35mil previously due to the lower average CPO price realised of RM2,472 per tonne compared to RM3,061 per tonne in 2017 despite a higher sales volume.

FGV said its CPO production for the period had improved by 18.4% to 0.67 million tonnes from the growth in fresh fruit bunches (FFB).

“The group’s improvement in operations is clearly demonstrated by a 23% increase in FFB production in the first quarter of 2018 compared to the same period in 2017,” FGV said in a filing with Bursa Malaysia.

The group expects the results of 2018 to be “satisfactory” despite the challenges.

“With the group continuing to focus on its core businesses along the value chain, the board expects this positive trend to continue for the rest of the year,” it said.

Last week, RAM Rating Services Bhd said it expects CPO prices to stay soft, as production is likely to outpace demand this year.

For this year, it expects the CPO price to be between RM2,300 per tonne and RM2,500 per tonne.

FGV’s earnings per share for the first quarter stood at 0.04 sen, while net asset per share stood at RM1.53.

Shares in FGV yesterday closed two sen or 1.25% higher to RM1.62.

Zakaria said that FGV would continue to push for greater productivity and cost efficiency in every sector.

“We expect to see this improving trend continue, as we are already seeing the results of efforts to enhance our performance. FGV has recruited sufficient labour to meet its requirements. Also, we have been aggressively replanting to correct our age profile.

“There is still much to do. We are focused on delivering results,” Zakaria said.

Meanwhile, in a separate filing with Bursa Malaysia yesterday, FGV has proposed to change its name to FGV Holdings Bhd.

Read more at https://www.thestar.com.my/business/business-news/2018/05/29/fgv-breaks-even-in-quarter-one/#0oFijHFf8ugtdL2Q.99