FGV flags weaker palm oil prices ahead after reporting turnaround in 1Q
28/05/2025 (The Edge Malaysia), Kuala Lumpur - FGV Holdings Bhd (KL:FGV) on Wednesday flagged lower palm oil prices in the short term after reporting a turnaround in the first quarter.
Prices of crude palm oil (CPO) per tonne are expected to ease from the current level of RM4,700 to around RM4,000 in the coming months, as supply improves with favourable weather, seasonally higher cropping cycles, and the absence of festive-related demand, FGV said in a statement.
“In the near term, the group will continue enhancing yields, extracting greater value from existing assets and expanding its footprint in the domestic consumer market,” FGV said.
Net profit for the three months ended March 31, 2025 (1QFY2025) was RM36.48 million compared with a net loss of RM13.49 million a year earlier, FGV said in an exchange filing. Revenue for the quarter rose by 11% year-on-year to RM5.04 billion thanks to higher palm oil prices.
“While challenges persist across several business segments, we are focused on driving operational efficiency, unlocking value from underperforming assets, and further enhancing integration across the group,” said FGV chief executive officer Fakhrunniam Othman.
FGV, one of the world’s biggest palm oil producers, said the plantation division achieved a 22% increase in average crude palm oil (CPO) price at RM4,784 per tonne while production of fresh fruit bunches expanded 6%.
Prices of the edible oil used in everything from snacks to diesel have declined about 12% so far this year amid worries over weak demand at a time of rising output. The benchmark palm oil futures is now trading at RM3,894 on Bursa Malaysia Derivatives.
Meanwhile, FGV’s oils and fats business however reported a loss of RM11.57 million primarily due to a lower margin in the bulk commodities segment and reduced processed palm oil delivery volumes.
Profit contribution from FGV’s sugar division, mainly through MSM Malaysia Holdings Bhd (KL:MSM), plunged 83% to RM11.46 million mainly due to reduced margin, lower sales volume and decreased capacity utilisation.
No dividends were declared for the single quarter.
Shares of FGV traded unchanged at RM1.30, valuing the company at about RM4.7 billion ahead of the results announcement at midday break.