FGV in the red in Q2 on lower CPO prices, higher cost

PETALING JAYA: FGV Holdings Bhd swung into the red in the second quarter ended June 30, 2018, registering a net loss of RM23.23 million versus a net profit of RM37.26 million in the previous corresponding quarter, dragged down by lower crude palm oil (CPO) prices and productivity, higher production cost as well as higher share of losses from joint ventures and associate companies.
Its revenue went down 18.4% to RM3.44 billion from RM4.21 billion.
The plantation firm said in a filing with the stock exchange today that the average (CPO) price realised was RM2,419 a tonne for the quarter under review, 13.5% lower than the RM2,796 a tonne previously.
CPO sales volume stood at 480,738 tonnes, 14.18% higher than the 421,045 tonnes in the previous corresponding quarter, while fresh fruit bunch production was marginally lower at 993,505 tonnes compared with 1.04 million tonnes.
The CPO oil extraction rate improved to 20.61% from 19.77%.
Given the poor performance, FGV acknowledged that further steps needed to be taken by the management to enhance operational effectiveness and efficiencies.
Meanwhile, the group is reviewing the findings of its investigations into six transactions and investment decisions and it has sought legal advice on the possible legal recourse.
For the first half of 2018, FGV reported a net loss of RM21.9 million against a net profit of RM38.96 million in the same period last year, while revenue dropped 17.5% to RM7.04 billion from RM8.53 billion.
FGV fell 5 sen or 2.9% to RM1.65 today on 2.87 million shares done.