KUALA LUMPUR (Mar 3): Felda Global Ventures Bhd (FGV) (Fundamental: 1.55; valuation: 1.20) is on track to achieve its target revenue of RM100 billion by 2020, through improved productivity and growth in its upstream businesses.

FGV group president and chief executive officer Datuk Mohd Emir Mavani Abdullah said the group would focus on improving internal production via mechanization of its processes, while looking at securing brownfield assets.

“Our initial public offering (IPO) gross proceeds of RM4.46 billion [in 2012] is to grow the upstream portion of our business, and  we are looking at brownfield assets.

"We are also looking at mechanization of processes, especially with labour policies that are coming in, for example from Indonesia,” he told reporters on the sidelines of the  2015/2016 Palm and Lauric Oils conference and exhibition today.

On whether the group would consider borrowing to finance acquisitions, given that it reportedly has a balance of 10% or RM400 million of its IPO proceeds left, Emir said that would depend on the kind of asset that the group would be looking at.

For its financial year ended Dec 31, 2014 FGV reported a 68.8% drop in net profits to RM306.37 million from RM982.25million in FY13, while revenue climbed 30.8% to RM16.43 billion from RM12.57 billion.

“Our core net profits, putting aside the aspect of our land lease agreement (LLA) with the Federal Land Development Authority (FELDA), is improving. So, our core function now is to stabilize our LLA with [FELDA,]” said Emir.

He said FGV was still in discussion with regards to its LLA, signed with Felda in 2012, in which FGV would pay the latter a fixed amount of RM250 million per year in cash for 20 years, and 15% share of operating profit from the sale of fresh fruit bunches derived from the estate land leased.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)