FGV Holdings Bhd’s net loss has narrowed to RM242.19 million for the financial year ending December 31, 2019 (FY19) from the RM1.08 billion recorded in FY18.

In a filing with Bursa Malaysia, it said revenue fell slightly to RM13.26 billion from RM13.46 billion previously, although the average crude palm oil (CPO) price realised in FY19 declined 11% to RM2,021 per tonne, compared with RM2,282 a year ago.

“This is due to improved full-year CPO ex-mill costs, which averaged at RM1,503 per tonne, compared with RM1,800 per tonne in FY18.”

The board of directors is recommending a final dividend payment of two sen per share for FY19, expected to be paid out by mid-July.

For the fourth quarter (Q4) of FY19, FGV recorded a net profit of RM75.79 million compared to a net loss of RM209.16 million in the previous corresponding quarter.

“This was achieved despite a 2.4% decline in revenue to RM3.15 billion for the quarter under review, compared with RM3.23 billion previously.”

The decline in revenue in Q4 was mainly due to a lower fresh fruit bunch production of 1.01 million tonnes, down 12% from 1.15 million tonnes in the previous corresponding quarter.

“This decline was mitigated by the higher CPO price realised at RM2,159 per tonne, compared with RM2,055 per tonne before.

“The oil extraction rate for the period under review was 1% lower at 20.53% from 20.7% previously,” it said, adding that as a result of lower production volume, ex-mill costs increased marginally by 3% to RM1,691 per tonne, compared with the RM1,638 recorded in Q4 FY18.

Meanwhile, the sugar sector under MSM Malaysia Holdings Bhd registered a loss of RM319.7 million compared to a profit of RM58.71 million in the previous financial year, mainly attributable to a lower gross profit, higher financing costs incurred due to the modification of certain terms, and the provision of RM143 million for plant and machinery impairment.

FGV group CEO Haris Fadzilah Hassan said its plan to diversify its revenue streams is well under way.

For FY20, he said, the group expects an additional revenue of RM45 million from its integrated farming, renewable energy and animal feed businesses.

“While palm oil remains our mainstay, this is an exciting diversification that will bring us and our smallholder partners added revenue and opportunities for growth.” – Bernama, February 28, 2020.