FGV sees lower Q1 profit on lower CPO prices, higher taxation

PETALING JAYA: Felda Global Ventures Holdings Bhd (FGV) reported a 21.9% decline in net profit to RM1.33 million for the first quarter (Q1) ended March 31, 2018 against RM1.7 million in the previous corresponding period, mainly due to lower crude palm oil (CPO) prices and higher taxation of RM16 million.
Revenue was down by 16.5% to RM3.6 billion from RM4.32 billion.
The plantation giant said in a filing with the stock exchange that despite improved productivity and higher sales volume, the plantation sector's profit fell 61.4% to RM18.29 million on the back of lower average CPO price realised of RM2,472 per metric tonne (MT) compared with RM3,061 per MT in Q1 2017.
The sugar Sector recorded a profit of RM22.01 million in Q1 2018, compared with a loss of RM23.16 million in the previous corresponding quarter, mainly attributable to lower raw material costs, favorable foreign exchange rate and a reduction in administrative expenses.
The logistics & support business sector also returned to the black registering a profit of RM25.36 million in Q1 2018, compared with a loss of RM39.50 million in the previous corresponding quarter, thanks to higher throughput in the bulking business and increased tonnage carried by the group's transport operations.
FGV group president and CEO Datuk Zakaria Arshad said the group will continue to push for greater productivity and cost efficiency in every sector.
"We expect to see this improving trend to continue, as we are already seeing the results of efforts to enhance our performance. FGV has recruited sufficient labour to meet its requirements. Also, we have been aggressively replanting to correct our age profile."
Whilst acknowledging market challenges ahead, the board expects the results of 2018 to be satisfactory.
At the midday break, FGV's share price gained 5 sen or 3.1% to RM1.65 on some 3.69 million shares done.