KUALA LUMPUR (Nov 30): FGV Holdings Bhd’s net profit for the third quarter ended Sept 30, 2021 (3QFY21) stood at RM399.39 million, a 191.76% jump from RM136.89 million in 3QFY20 on the back of higher revenue due to better operational profit driven by higher crude palm oil (CPO) price and improved performance of its sugar and logistics sectors.
The plantation group’s earnings per share swelled to 10.9 sen compared with 3.8 sen previously, as its filing with Bursa Malaysia showed.
Quarterly revenue climbed 33.25% to RM5.32 billion against RM3.99 billion a year ago.
According to FGV, profit in the plantation sector surged to RM481.19 million from RM232.89 million a year ago, on the back of higher average CPO price realised of RM3,798 per tonne and higher sales volume of fertiliser.
“The improved performance of the sector was also due to the lower fair value charge on LLA [land lease agreement] of RM107.04 million compared with RM123.72 million in corresponding quarter of the previous year and increased share of profit from joint venture of RM19.72 million in the current quarter this year,” it said.
Meanwhile, the sugar sector reported a profit of RM18.18 million, a turnaround from the RM56.33 million loss in the corresponding quarter of the previous year. FGV noted the quarter under review profit includes the gain from liquidation of excess raw sugar hedges of RM30.96 million.
“Logistics and other sectors recorded a higher profit by 41.1% to RM20.87 million. [The] Logistic division reported higher profit by 33% compared to the corresponding quarter of the previous year attributed to increase in throughput handled while results for 'IT and Others' divisions remain the same,” the group explained.
Compared with the immediate preceding quarter, FGV’s 3QFY21 net profit increased by nearly 18% from RM338.82 million in 2QFY21, as revenue grew by 13.54% from RM4.68 billion.
For the cumulative nine months ended Sept 30, FGV’s net profit soared to RM702.79 million from RM15.09 million a year earlier. Cumulative revenue expanded by 33% to RM13.39 billion from RM10.07 billion.
Despite the prolonged acute labour shortage issue and Covid-19 pandemic related operational disruption which continues to affect the group’s productivity, FGV’s Group Chief Executive Officer Mohd Nazrul Izam Mansor said he expects the situation to turn around starting from the second quarter ending June 31, 2022 (2QFY22).
“This is in view of the recent announcement by the government to bring in 32,000 foreign workers into the country which will boost labour coverage at our plantations which currently stands at only 70% of our total requirement.
“In relation to that, FGV’s extensive vaccination programme for our foreign workers nationwide is also on track. We expect to achieve 100% completion of two doses for all workers very soon in ensuring a safe working environment at our plantations.
“Moving forward, in line with our commitment to becoming a net-zero business by 2050, we are embarking on a group-wide climate action plan across our operations to fight climate change. As such, we have developed an integrated climate action plan based on six key strategic factors: climate governance and risk management, carbon management, operational efficiency, waste management, water management and climate awareness,” added Mohd Nazrul in a separate statement.
FGV is Malaysia's first food and agribusiness company to formalise the commitment by signing the United Nations (UN)-backed Science Based Target initiative (SBTi) Business Ambition for 1.5°C pledge, which calls for limiting global warming to 1.5°C.
“Through this commitment, we will be adopting science-based targets as our carbon management. Although this is the minimum target that we are committed to, we are finalising our comprehensive Greenhouse Gas (GHG) Inventory in setting up an ambitious reduction target for the Group,” Mohd Nazrul added.
FGV’s share price added two sen to RM1.48, valuing the group at RM5.4 billion. The counter has risen 14.7% year-to-date.