KUALA LUMPUR (May 27): Shares of Felda Global Ventures Holdings Bhd (FGV) fell in early trade today after the world’s largest palm oil producer saw its net profit plummet 97% to only RM3.58 million, or 0.1 sen per share, in the first quarter ended March (1QFY15).

At 9.15am, FGV lost 3.98% or 8 sen to RM1.93 with 1.67 million shares done.

The company blamed the poor financial results on the flash floods last year and early this year that affected half of it plantations and weak crude palm oil (CPO) prices.

In comparison, the group posted a net profit of RM143.63 million, or 3.9 sen per share in the previous corresponding quarter.

According to a filing with Bursa Malaysia, FGV’s (fundamental: 1.55; valuation: 1.4) revenue shrank 20.6% to RM2.96 billion in 1QFY15 compared with RM3.73 billion in 1QFY14.

CIMB Research has maintained its “Reduce” rating on FGV at RM2.01 with a lower target price of RM1.92 (from RM2.01) and said the results were below house and consensus full-year projections of RM311 million and RM430 million, respectively.

The research house said the key culprits were lower-than-expected FFB output and RM44m downstream losses. As expected, no dividend was declared in 1Q15.

“We cut our core FY15 EPS by 18% to reflect lower FFB output and weaker downstream earnings. This reduces our SOP target price to RM1.91.

“The stock remains a Reduce as we are concerned about the poor results and its potential removal from the FBM 30 index during the Jun review due to its lower market capitalisation,” it said.

(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. Go to www.theedgemarkets.com for details on a company’s financial dashboard.)