FGV shares drop nearly 7% in early trade
29.08.2018 (The Star Online) - KUALA LUMPUR: Shares of FGV Holdings Bhd fell 7% in early trade after reports said it was investigating several of its business practices following “adverse findings” from an earlier probe into its investments.
The plantation counter slipped 11 sen, or 6.66% to RM1.54 with over six million shares done.
FGV said the internal investigations are examining open credit lines, poor purchasing trading practices and palm oil sales, direct awards of procurement contracts that breach best practices, and the shortage of workers from mid-2016 to mid-2018 that resulted in financial losses over the period.
FGV said the investigation had revealed “adverse findings”, without explaining what they were, and that it had sought legal advice on possible recourse.
FGV has sought legal advice on the possible recourse on the RM100mil bad debts, direct awards of procurement contracts and also the critical workers shortage which resulted in RM170mil losses.
FGV also said the investigations, which have been completed included the acquisition of Asia Plantations Limited (APL); investment in FGV Cambridge Nanosystems Ltd (FGV CNS) and the acquisition of the Troika condominiums,
Meanwhile, FGV registered a net loss of RM23.23mil in the second quarter ended June 30, 2018, due to lower productivity, higher production cost, higher share of losses from joint ventures and associate companies and lack of operational effectiveness and efficiencies.
FGV announced on Tuesday profit before zakat and tax (PBZT) fell by 98.7% to RM1.25mil from the RM102.44mil a year ago.
Revenue fell by 18.4% to RM3.43bil from RM4.21bil. Loss per share was 0.64 sen compared with earnings per share of 1.02 sen.
According to FGV, for the first half, it posted net losses of RM21.89mil compared with net profit of RM38.96mil in the previous corresponding period. Its revenue fell by 17.4% to RM7.04bil from RM8.53bil.