KUALA LUMPUR (Aug 30): Troubled Felda Global Ventures Holdings Bhd’s (FGV) net profit dropped 64.8% to RM25.91 million in the second quarter ended June 30, 2017 (2QFY17) from RM73.69 million a year ago, as higher contribution by both plantations and logistics and others segments were dragged by losses incurred by its sugar business unit.
Earnings per share (EPS) fell to 0.7 sen from 2 sen in 2QFY16.
Quarterly revenue, however, managed to increase by a marginal 1.9% to RM4.22 billion in 2QFY17 from RM4.14 billion in 2QFY16.
In a filing with Bursa Malaysia today, FGV said the plantations sector made an operating profit of RM148.1 million against an operating loss of RM9.69 million a year ago, driven by higher crude palm oil (CPO) selling prices and lower CPO production costs.
The logistics and others sector's operating profit was up 9.56% year-on-year (y-o-y) at RM5.96 million, while its sugar segment posted a loss of RM41.6 million compared with a profit of RM99.15 million last year.
For the cumulative six months (1HFY17), FGV posted a net profit of RM28.38 million against a net loss of RM7.39 million a year ago, thanks to higher contribution from the plantations and logistics and others segments, but partly offset by impairments and provisions amounting to RM62.3 million in the plantation sector in 1QFY17.
Revenue rose 8.2% to RM8.55 billion in 1HFY17 from RM7.9 billion in 1HFY16.
On prospects, FGV expects its performance for the financial year ending Dec 31, 2017 (FY17) to be satisfactory.
It said weaker performance of new crops and labour shortages has resulted in flat fresh fruit bunch (FFB) production y-o-y in 1HFY17.
However, the group expects FFB production for 2HFY17 to improve further due to increased productivity resulting from higher output of crops and consolidated efforts to overcome the shortage of plantation workers.
"FGV is currently on track to achieve its replanting target this year of 14,000ha, of which around 10,000ha have been cleared. Out of this, 1,478ha have been fully planted in 1HFY2017.
"The group has also reduced administrative expenses by 5% to RM439 million compared with the same period last year," it said.
FGV also said it will continue its effort to consolidate by-products business such as palm kernel shell, sludge oil, biomass and biogas. "The group is expecting an additional revenue of more than RM60 million per year for export and local markets."
At noon market break, FGV shares closed unchanged at RM1.60 with 523,200 shares traded, giving it a market capitalisation of RM3.65 billion.