MARKET DEVELOPMENT
FGVH Still Looking At Asset Acquisitions
FGVH Still Looking At Asset Acquisitions
31/08/2013 (The Sun Daily) - Felda Global Ventures Holdings Bhd (FGVH), the world's third largest oil palm planter by planted hectarage, sees opportunities to acquire strategic assets at reasonable valuations given the current low crude palm oil (CPO) prices.
"We have announced our first few acquisitions of PT Temila Agro Abadi (TAA) and PT Landak Bhakti Palma in West Kalimantan in early July 2013, which was in line with the group's strategic blueprint where key focus is on core commodities such as palm oil, rubber and sugar," its president and CEO Mohd Emir Mavani Abdullah said in a statement yesterday.
"These additional land banks will enhance our future earnings in palm and rubber and simultaneously increase our shareholder value," he added.
The TAA land is located adjacent to the group's existing 14,385ha of land held by PT Citra Niaga Perkasa which, Emir said, bodes well as economies of scale in estate management can be achieved by sharing of resources such as labour, nursery and palm oil mill.
"We are single-minded in our determination to be the leading globally diversified integrated agri-business. We have a strong asset base and we will use our strengths to further pursue regional opportunities," he said.
FGVH currently operates 350,000ha of oil palm plantations in Malaysia.
The group saw its net profit surge 71% to RM322.71 million for the second quarter ended June 30, 2013 (Q2FY13) from RM188.37 million a year ago, on higher fair value changes in land lease agreement liability amounting to RM176.52 million.
However, revenue for Q2FY13 fell 15% to RM2.99 billion from RM3.54 billion, primarily due to lower average CPO price realised as well as higher replanting and staff costs.
For the six months period (H1FY13), its net profit increased 21% to RM459.43 million from RM380.53 million a year ago, while revenue rose 8% to RM5.67 billion from RM5.26 billion, mainly driven by its sugar segment which grew by 32% on the back of higher volume of export, as well as a turnaround in its downstream segment due to an improved contribution from the US fatty acid business and better margins.
However, the improved performance was offset by a 61% decline in plantation revenue due to lower average CPO price realised of RM2,279 per tonne in H1FY13 against RM3,230 per tonnes in H1FY12. In addition, FFB average price decreased to RM434 per tonne in H1FY13 from RM623 per tonne a year ago.
"Barring any unforeseen circumstances, we remain optimistic of the prospect for the rest of the year," said Emir.
"We have announced our first few acquisitions of PT Temila Agro Abadi (TAA) and PT Landak Bhakti Palma in West Kalimantan in early July 2013, which was in line with the group's strategic blueprint where key focus is on core commodities such as palm oil, rubber and sugar," its president and CEO Mohd Emir Mavani Abdullah said in a statement yesterday.
"These additional land banks will enhance our future earnings in palm and rubber and simultaneously increase our shareholder value," he added.
The TAA land is located adjacent to the group's existing 14,385ha of land held by PT Citra Niaga Perkasa which, Emir said, bodes well as economies of scale in estate management can be achieved by sharing of resources such as labour, nursery and palm oil mill.
"We are single-minded in our determination to be the leading globally diversified integrated agri-business. We have a strong asset base and we will use our strengths to further pursue regional opportunities," he said.
FGVH currently operates 350,000ha of oil palm plantations in Malaysia.
The group saw its net profit surge 71% to RM322.71 million for the second quarter ended June 30, 2013 (Q2FY13) from RM188.37 million a year ago, on higher fair value changes in land lease agreement liability amounting to RM176.52 million.
However, revenue for Q2FY13 fell 15% to RM2.99 billion from RM3.54 billion, primarily due to lower average CPO price realised as well as higher replanting and staff costs.
For the six months period (H1FY13), its net profit increased 21% to RM459.43 million from RM380.53 million a year ago, while revenue rose 8% to RM5.67 billion from RM5.26 billion, mainly driven by its sugar segment which grew by 32% on the back of higher volume of export, as well as a turnaround in its downstream segment due to an improved contribution from the US fatty acid business and better margins.
However, the improved performance was offset by a 61% decline in plantation revenue due to lower average CPO price realised of RM2,279 per tonne in H1FY13 against RM3,230 per tonnes in H1FY12. In addition, FFB average price decreased to RM434 per tonne in H1FY13 from RM623 per tonne a year ago.
"Barring any unforeseen circumstances, we remain optimistic of the prospect for the rest of the year," said Emir.