FGV Q4 earnings down 31.9%

PETALING JAYA: FGV Holdings Bhd's net profit fell 31.9% to RM76.57 million for the fourth quarter ended Dec 31, 2017, from RM112.46 million in the previous corresponding quarter.
Revenue for the quarter decreased 17% to RM4.28 billion, compared with RM5.15 billion in the same period in 2016.
For the full year, FGV's net profit jumped more than four fold to RM143.7 million, from RM31.5 million a year ago, attributed to a strong performance from plantation and logistics and others (LO) sectors.
Revenue dropped marginally by 1.5% to RM16.97 billion, against RM17.2 billion previously.
In a statement today, FGV president and CEO Datuk Zakaria Arshad said the group's 2017 full-year results improved in line with the group's transformation and growth initiatives during the year.
He said the transformation and growth enhancing efforts will continue into 2018, where the management expects further positive results to be achieved.
"We increased our focus on the plantation business last year through our strategic transformation plan and the results have been encouraging. We are confident the momentum will continue this year supported by sustainable growth in LO sector and improvement by sugar sector," he added.
Moving forward, FGV said the group is expecting to normalise labour shortage by mid this year, which will improve harvesting efficiency, increase 2017 fresh fruit bunches (FFB) production by 9% to 4.85 million metric tonnes (MT), while reducing CPO production ex-mill cost per MT to RM1,562.
"We will continue to grow our LO sector business capabilities to generate external opportunities for the group, including procuring new liquid and dry tankers and external business opportunities from various infrastructure projects.
"For the sugar sector, we have made progress through effective cost management, capital strengthening and rationalising our operations. In addition, our new sugar refinery in Johor will begin operations in 2H 2018 which will increase our sugar refining capacity for export markets," he added.
The group's plantation sector registered a significant improvement with a profit of RM554 million from RM234 million in the previous year on the back of higher FFB production, better crude palm oil (CPO) sales margins and stronger performance from JV companies.
FGV's CPO production increased 12% to 2.99 million MT in line with the growth in FFB production from 3.91 million metric tonne (MT) in FY2016 to 4.26 million MT in FY2017, while its average age profile improved from 14.9 years to 14.5 years.
The LO sector recorded a higher profit of RM45 million compared with RM8 million in previous year mainly due to higher throughput in its bulking business, and increased tonnage carried by the transport operations in tandem with the increase in CPO production volume.
However, FGV's sugar sector posted a smaller profit in 2017 due to higher international raw sugar price and weakened ringgit compared with the previous year.
At 12.30pm today, FGV's share price slipped three sen or 1.47% to RM2.01 with 5.26 million shares changing hands.