News | FGV 2Q net profit soars over 16 times to RM338.8m on improvement in realised CPO prices, other business segments

KUALA LUMPUR (Aug 30): FGV Holdings Bhd has posted a soaring growth of over 16 times year-on-year in its net profit for the second quarter ended June 30, 2021 (2QFY21) to RM338.82 million, from RM20.55 million previously, mainly attributed to increased palm products margin, improved gross profit margin for its sugar business, as well as higher throughput and cargo volume handled by its logistics business.

In addition, the group reported fair value gain on land lease agreement (LLA) of RM180 million compared to fair value charge on LLA of RM76 million registered in the previous corresponding quarter, attributed mainly to the revision in the yield assumption used in arriving at the LLA liability.

For its plantation business, FGV recorded higher average crude palm oil (CPO) price realised of RM3,333 per metric tonne (MT), which is 44% higher compared to average CPO price realised in 2QFY20 of RM2,309 per MT.

Earnings per share rose to 9.3 sen from 0.6 sen as a result.

According to its filing with Bursa Malaysia today, quarterly revenue stood at RM4.68 billion, up by 42.1% from RM3.29 billion recorded in the same quarter last year. 

For the first half of the financial year (1HFY21), FGV recorded a net profit of RM303.4 million against a net loss of RM121.8 million during the same period last year, as its revenue grew 32.9% to RM8.08 billion from RM6.08 billion. 

Earnings per share stood at 8.3 sen, against losses per share of 3.3 sen.

To address the ongoing Covid-19 pandemic, FGV’s newly appointed group chief executive officer Mohd Nazrul Izam Mansor said the group is expediting its vaccination programme for all workers as part of its mitigation effort in managing the risk of infections at its operating locations. 

“We are currently at the final stage of acquiring the vaccines and shall commence the vaccination programme by the first week of September 2021,” he said. 

On its prospects, Mohd Nazrul pointed to FGV’s recent memorandum of collaboration with Felcra Bhd and Qatar-based Baladna Food Industries, to carry out a comprehensive feasibility and technical study on an opportunity to potentially co-invest in an integrated dairy farm business in Chuping, Perlis.

He said the collaboration is intended to deliver sustainable value for FGV’s stakeholders, better livelihood for the local community, and address food security concerns for the country. 

“The potential initial areas of collaboration include doubling the current production of Malaysian fresh milk within two years, and creating a farm for ten thousand milking cows with an annual production of 100 million litres of milk per year. 

“Other potential areas include utilising Malaysian agricultural land to produce largely the required animal feed for the dairy farm, as well as using the joint venture farm as a hub that supports small rural farms in developing small cattle fattening farms and animal feed farms by 2024, among others,” Mohd Nazrul added. – THE EDGE

by Emir Zainul

kredit foto: The Star

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