Malaysia's palm oil giant FGV swings to profit in Q1 earnings
31/05/2022 (Channel News Asia), Kuala Lumpur - Malaysian palm oil planter FGV Holdings reported on Tuesday it swung to a profit in the first quarter, helped by higher crude palm oil prices and improved sales volume.
Net profit during the January-March period rose to 369.2 million ringgit, compared to a loss of 35.4 million ringgit ($8.09 million) in the same quarter last year. Revenue jumped 73 per cent to 5.85 billion ringgit ($1.34 billion).
"With the group continuing to focus on its core businesses, the board is confident that the elevated crude palm oil price will have a positive impact on the group's financial result for 2022," the firm said in a bourse filing.
A cocktail of supply disruptions in global edible oils due to Russia's invasion of Ukraine, labour shortages in Malaysia and export restrictions in top producer Indonesia have pushed benchmark crude palm oil (CPO) prices to record highs of more than 7,000 ringgit a tonne this year.
"The supply disruption of competing edible oils caused by the Ukraine war is expected to maintain the CPO price at 4,500 ringgit to 5,000 ringgit per metric tonne in 2022," FGV, the world's largest crude palm oil producer, said.
The contract traded at 6,270 ringgit ($1,432.49) on Tuesday.
FGV said while labour shortage remained critical, there should be a gradual recovery this year as workers are expected to arrive from the third quarter onwards.
The Malaysian Palm Oil Association (MPOA) sees about 52,000 migrant workers arriving by the end of the year, but warned that this would be too little, too late for output to rebound in the world's second-largest producer.
($1 = 4.3770 ringgit)