KUALA LUMPUR — May 16, 2016: Felda Global Ventures Holdings (FGV) aims to record higher profits in the current financial year, supported by growth in existing assets.
However the conglomerate is not targetting any immediate mergers and acquisitions (M&A) at least until the year’s end.
The strategic plans in the pipeline include focusing on core business, assets rationalisation, reducing complexity in management and increasing plantation yield.
“We can obtain growth in other areas like in our existing business. We are still a global business and we sell outside Malaysia.
“For M&As, we just want to pause… until the end of the year. Our main focus is to cut down overall cost in both operations and and production,” Group President and Chief Executive Officer Datuk Zakaria Arshad said to reporters on FGV’s future plan here today.
For the financial year ended last December 31, FGV’s pre-tax profit fell sharply to RM359.93 million from RM957.64 million previously.
On production, Zakaria said FGV’s total output this year would decrease by about 17 per cent due to the hot weather brought about by the El Nino
But fresh fruit brunch (FFB) production is expected to improve in the second half of the year. Last year FGV reaped 17.7 tonnes per hectare of FFB.
“Our production will be down by about 17 per cent this year due to the El Nino. This is in line with the industry average but the impact on some planters would be even greater,” said Zakaria.
Nevertheless the impact is expected to be offset by higher crude palm oil prices this year.
It is speculated that by August, the price of crude palm oil would hover between RM2,600 and RM2,800 per tonne.
FGV is set to announce this year’s first quarter results on May 24. — Bernama