MARKET DEVELOPMENT
UPDATE 1-Malaysia's Felda Global Ventures Says to Rationalise Operations
UPDATE 1-Malaysia's Felda Global Ventures Says to Rationalise Operations
23/11/2016 (Reuters) - Malaysia's Felda Global Ventures Holdings Bhd said on Tuesday it would rationalise its operations, which could lead to financial impairments and losses.
This is to "address the inherent structural and financial issues weighing upon our business," the world's third largest palm plantation operator said in a statement late on Tuesday.
"We will not be sentimental about our assets. Where we don't see a meaningful return, we shall cut our losses," said Chief Executive Zakaria Arshad.
Earlier in the day, Felda reported a wider net loss for the third quarter ended September, largely due to lower crude palm oil production, a fall in earnings from its downstream segment and poor performance of a jointly controlled entity.
Net loss came in at 94.9 million ringgit ($21.40 million), compared with 33.9 million ringgit a year earlier, while revenue fell to 4.19 billion ringgit from 4.51 billion ringgit.
The company said it expected to post a full-year loss, and that higher CPO prices could compensate for lower crop production, but the upside could be limited by a narrower price discount against soyoil.
Slower global growth and currency volatility due to a stronger dollar continue to affect the group, the company said.
Felda said it would focus on consolidating its assets next year for sustainable returns, but that "there are still tough decisions to be made before the end of this year."
The company, which has also interests in sugar, rubber and trading and logistics, had said in August that it was disposing its stake in a local insurance company.
Felda shares closed 10.6 percent lower, underperforming a 0.1 percent gain in the benchmark stock index.
($1 = 4.4350 ringgit)
This is to "address the inherent structural and financial issues weighing upon our business," the world's third largest palm plantation operator said in a statement late on Tuesday.
"We will not be sentimental about our assets. Where we don't see a meaningful return, we shall cut our losses," said Chief Executive Zakaria Arshad.
Earlier in the day, Felda reported a wider net loss for the third quarter ended September, largely due to lower crude palm oil production, a fall in earnings from its downstream segment and poor performance of a jointly controlled entity.
Net loss came in at 94.9 million ringgit ($21.40 million), compared with 33.9 million ringgit a year earlier, while revenue fell to 4.19 billion ringgit from 4.51 billion ringgit.
The company said it expected to post a full-year loss, and that higher CPO prices could compensate for lower crop production, but the upside could be limited by a narrower price discount against soyoil.
Slower global growth and currency volatility due to a stronger dollar continue to affect the group, the company said.
Felda said it would focus on consolidating its assets next year for sustainable returns, but that "there are still tough decisions to be made before the end of this year."
The company, which has also interests in sugar, rubber and trading and logistics, had said in August that it was disposing its stake in a local insurance company.
Felda shares closed 10.6 percent lower, underperforming a 0.1 percent gain in the benchmark stock index.
($1 = 4.4350 ringgit)