KUALA LUMPUR (May 29): FGV Holdings Bhd posted a net loss of RM3.37 million in the first quarter ended March 31, 2019 versus a net profit of RM1.13 million a year earlier, due mainly to a sharp decline in crude palm oil (CPO) prices, and lower average selling price in the sugar sector.

In a filing with the stock exchange, the plantation group said revenue for the quarter dipped to RM3.28 billion from RM3.6 billion a year ago.

Loss per share was 0.09 sen against earnings per share of 0.03 sen a year earlier. No dividend was declared.

In a separate statement, FGV group chief executive officer Datuk Haris Fadzillah Hassan said the plantation operations have been focused on tightening procurement processes involving capital and operating expenditures and implementing new tasking systems and processes for infield workers, adding that these efforts are starting to bear fruit.

“Additionally, several other estate and milling transformation initiatives have started delivering results,” he said.

Haris said the group’s downstream business also performed better for the period under review.

He explained that the Downstream Sector exceeded internal sales targets, primarily due to the implementation of the B10 biodiesel mandate which came into effect in February 2019.

“Meanwhile, the palm kernel processing business recorded a higher margin.

“We are strategically reviewing our downstream businesses and believe that they will continue to grow and contribute positively to FGV’s performance,” he said.

On its outlook, Haris said this financial year has started with clear signs that FGV is on track to turn around its operations.

“While we continue to monitor all our initiatives, FGV is also exploring strategic initiatives to reduce the dependence on palm oil and the impact of CPO prices.

“I am confident that we will be able to achieve the targets set for FY2019,” he said.

At the midday break, FGV rose 3.48% or 4 sen to RM1.19 with 3.81 million shares traded.