KUALA LUMPUR — Feb. 28, 2019: FGV Holdings reported a net loss of RM1.080 billion last year compared with a net profit of RM130.928 million the year before.
In a filing with Bursa Malaysia, it also mentioned on the decrease in revenue of RM13.467 billion from RM16.921 billion in 2017.
The group’s result was largely hit by impairments and lower average crude palm oil (CPO) price of RM2,282 per tonne for the year. No dividend was paid during the quarter ended last December 31.
In a separate statement, FGV said it recorded a loss before zakat and tax (LBZT) of RM1 billion against a profit before zakat and tax (PBZT) of RM403 million the previous year due in large part to impairments and provisions totalling RM1.038 billion.
The decline in average CPO price during the period under review also affected performance.
Group Chief Executive Officer Datuk Haris Fadzilah Hassan said that in the fourth quarter, the plantation operations were focused on plugging leaks, revising processes and implementing new controls to bring state performance in line with other large players in the industry.
Some of these initiatives are already starting to bear fruit but the improvements will be more visible in 2019.
The sugar sector recorded a loss of RM13 million for the quarter in review compared with a profit of RM24 million in the previous corresponding quarter while the logistics and support businesses sector registered a profit of RM19 million, a steep decline from a profit of RM109 million registered a year earlier. This is due to the impairment of receivables amounting to RM10 million and following a change in the sector’s business model.
FGV’s transformation plan was approved by the board and phased implementation started last October and the early initiatives to plug leaks and change processes are showing early signs of success.
“We have been tracking the performance of estate by estate for the last few months and can clearly see where the gaps are and how to address them.
“To date 59 per cent of FGV’s estates have met their budget numbers or exceeded them,” Haris said.
At the mill level, initiatives to tighten controls and reduce milling losses were underway, FGV is monitoring its mill utilsation rate and has put in place steps to increase sourcing of FFB from independent smallholders and other third parties.
FGV’s replanting regimen is also on track to normalise palm age profile by 2026. This year FGV has targeted to replant 15,000 hectares of with oil palm.
At a strategic level, plans to exit non-core businesses are underway. Similarly, manpower rationalisation efforts are being implemented. — Bernama