KUALA LUMPUR (Aug 24): FGV Holdings Bhd reported today a second-quarter net profit of RM20.55 million versus a net loss of RM52.2 million a year earlier on factors including an improvement in the group's oil palm plantation operations.

In a statement to Bursa Malaysia today, FGV said revenue rose to RM3.29 billion for the second quarter ended June 30, 2020 (2QFY20) from RM3.28 billion.

In quarterly terms, FGV said it returned to the black in 2QFY20 against a net loss of RM142.35 million for the preceding 1QFY20.

"The group reported a profit before zakat and taxation of RM17.82 million, compared to a RM163.05 million loss for the preceding quarter, on the back of a higher revenue of RM3.29 billion and an improvement in plantation and [the] logistic and others sector’s results for the current quarter.

"The plantation sector reported a profit of RM47.11 million, compared to an RM152.09 million loss for the preceding quarter," FGV said.

Compared with a year earlier, FGV said today the improved financial performance was largely due to the increase in crude palm oil (CPO) prices and narrowing losses at the sugar sector.

"For the period under review, CPO prices averaged RM2,309 per metric tonne (MT), which was 18% higher than the average CPO prices realised in 2QFY19 of RM1,955 per MT.

"Despite higher CPO prices, the group's revenue for the period increased marginally to RM3.29 billion compared to RM3.28 billion in 2QFY19 as other business segments reported lower revenues," FGV said.

For 1HFY20, FGV said cumulative net loss, however, widened to RM121.8 million from RM55.57 million a year earlier. FGV said revenue fell to RM6.08 billion from RM6.56 billion.

Looking ahead, FGV said the group expects stronger 2HFY20 results for its plantation segment as oil palm fresh fruit bunch and CPO production across its operations normalise after a slow start earlier this year.

"Demand for CPO is poised to recover as global markets open up from strict lockdowns in the first half of 2020. Sugar sector will continue to be challenging and will focus on its turnaround plan, product diversification and export market.

"The board expects the overall business environment to remain uncertain and volatile," FGV said.

At 2.59pm today, FGV shares were traded unchanged at RM1.19, which values the company at RM4.34 billion. Around 12 million shares were transacted.

FGV undertakes its sugar operations through its 51%-owned subsidiary MSM Malaysia Holdings Bhd, according to FGV's website.

Edited by Chong Jin Hun