KUALA LUMPUR: FGV Holdings Bhd recorded a net profit of RM75.79mil in the fourth quarter of its financial year ended Dec 31,2019, versus a net loss of RM209.16mil in the previous corresponding quarter.
In a statement, the group attributed the profit to improved crude palm oil margins, reduced operating costs and lower impairment losses of RM17mil as compared to RM151mil in 4Q of the previous year.
Group revenue was 2.4% lower year-on-year (y-o-y) at RM3.15bil owing to lower fresh fruit brunch production, although this was mitigated by a higher CPO price realised of RM2,159 per metric tonne.
Cumulatively in 2019, FGV posted a net loss of RM242.19mil versus a net loss of RM1.08bil in the previous year. Revenue for FY19 was RM13.26bil, or 1.5% lower than in the previous year.
The board of directors have recommended a final dividend of two sen per share.
“I am pleased to report a quarterly net profit of RM76 million, achieved on the back of FGV’s aggressive transformation programme driven by the Board and Management,” said FGV group CEO Datuk Haris Fadzilah Hassan.
“We reached far into the core of the Group to effect change at every level. Our intention is to institutionalise this change, to protect and enhance the interests of the owners of this company, now and in the future.”
Meanwhile, the sugar sector under MSM Malaysia Holdings Bhd continued to be loss-making as it widened its loss before zakat and tax to RM320mil, as compared to RM59mil in FY18.
"This is due to lower gross profit margins of 0.5% compared to 9% in the previous year, as well as low utilisation rates in its Johor plant.
"Decrease in revenue from the Sector of 9% was mainly due to the drop in average selling price by 6% (2019: RM2,117 per MT, 2018: RM2,263 per MT)," said FGV.
The group expects the worst to be over for MSM with plans underway to address its excess capacity issues.
In the logistics sector, the group recorded a profit before zakat and tax of RM23mil in 4Q, which was 5% higher than in the previous corresponding quarter due to an increase in tonnage carried and storage volume.
Moving forward in FY20, FGV's diversification plans are expected to yield additional revenue of RM45mil from its integrated farming, renewable energy and animal feed businesses.
“While palm oil will remain our mainstay, this is an exciting diversification that will bring us and our smallholder partners added revenue and opportunities for growth,” said Haris Fadzilah.
Source: The Star Online