This article first appeared in The Edge Financial Daily on April 30, 2019

KUALA LUMPUR: FGV Holdings Bhd chairman Datuk Wira Azhar Abdul Hamid hopes history will regard 2018 as a “watershed year” for the plantation group as its directors took bold and concrete steps to set it back on the right track.

In addition to a transformation plan put in place last year, the group also set strategic objectives and formulated Business Plan 2019-2021 (BP21) to guide it in implementing value-adding activities to maximise shareholder returns, Azhar said in FGV’s annual report 2018 published yesterday.

“All of us on the board agree that we were challenged, as we never have been before. There were several occasions when we debated long and hard over the best way forward, when there were difficult decisions to be made.

“On every occasion, we were guided by the principles of good governance, fairness and responsibility, fully aware that we serve our shareholders,” he said.

 FGV recorded a net loss of RM1.08 billion for the 12 months ended Dec 31, 2018 (FY18) — versus a net profit of RM130.93 million in FY17 — as it was impacted by impairments and lower crude palm oil prices. Revenue fell to RM13.47 billion from RM16.92 billion.

In the annual report, Azhar said BP21 is anchored on the theme “Stop the decline and drive sustainable growth”, and is driven by several key principles, namely better resource utilisation to generate higher returns on assets; portfolio enhancements to balance structural inefficiencies; value maximisation through an integrated business value chain; commercially-driven and accountable business decision-making; and, optimising human capital potential in driving growth.

“With BP21, we aim to identify and solve shortcomings hindering FGV’s growth and draw lessons from which we can move forward. Ultimately, we are steering FGV back on course to ensure its sustainability and realise value for our shareholders,” he said.