KUALA LUMPUR (Nov 28): FGV Holdings Bhd narrowed its net loss to RM262.41 million for the third financial quarter ended Sept 30, 2019 (3QFY19), from RM849.46 million in the previous year's corresponding quarter, amid lower impairments.

The group attributed the loss for the quarter to impairments amounting to RM304 million, lower crude palm oil (CPO) price realised and losses in the sugar business.

For comparison, the group made asset impairments amounting to RM788 million in 3QFY18.

The plantation group's revenue increased 11% during the quarter to RM3.55 billion from RM3.19 billion in the previous year's corresponding quarter, despite the sharp decline in CPO price and lower average selling price for sugar.

CPO prices averaged at RM1,983 per metric tonne (MT), it said, which was 11% lower than the average CPO price realised of RM2,224 per MT in the previous year's corresponding quarter.

The plantation sector posted a 15% increase in fresh fruit bunch (FFB) production to 1.24 million MT from 1.08 million MT in 3QFY18.

It saw a marginal increase in its CPO oil extraction rate during the quarter, which supported a 21% increase in CPO production to 832,000 MT, versus 689,000 MT in the previous year.

The better production volumes and operational efficiencies resulted in lower ex-mill costs of RM1,500 per tonne for the quarter, compared with RM1,852 per tonne in 3QFY18.

The downstream sector also saw improved performance, with the gross profit margin for the palm kernel processing business improving to 7%, compared to 2% in 3QFY18.

Meanwhile, the sugar segment posted RM220 million of loss for 3QFY19, versus a profit of RM22 million in the previous corresponding quarter, due to an impairment of RM145 million for property, plant and equipment.

The business was also hit by a 3% and 4% decline in average selling price for MSM Malaysia Holdings Bhd's domestic and industry segments respectively, which was attributed to an increase in the issuance of approved permits.

For the nine months ended Sept 30, its net loss was lower at RM317.98 million, compared with its net loss of RM871.77 million a year earlier, while revenue fell 1% to RM10.1 billion to RM10.2 billion.

In a statement, FGV group chief executive officer Datuk Haris Fadzilah Hassan said the group's transformation plan was bearing fruit, evidenced by the significant improvement in operational performance.

"With higher CPO price in the fourth quarter, our improving operational numbers bode well for the future," he added.

FGV shares fell two sen or 1.61% to RM1.22, giving a market capitalisation of RM4.45 billion.