KUALA LUMPUR (May 28): FGV Holdings Bhd has slipped into the red for the first quarter ended March 31, 2021 (1QFY21), posting a net loss of RM35.42 million, from a net profit of RM134.93 million in the immediate preceding quarter.

In a bourse filing, the group said the losses were attributable to lower contributions from all its business segments.

Quarterly revenue declined by 15.3% quarter-on-quarter (q-o-q) to RM3.39 billion from RM4.01 billion.

On a year-on-year (y-o-y) basis, the group’s quarterly net loss was significantly narrower compared with RM142.35 million. 

Quarterly revenue grew 21.9% y-o-y from RM2.78 billion.

The group said the y-o-y net loss was attributed to improved performances from all of its business segments, as well as higher crude palm oil (CPO) prices.

Its plantation division saw a lower loss of RM50.78 million, from RM147.27 million in 1QFY20, thanks to higher margins as a result of CPO prices rising to RM3,172 a tonne during the quarter, from RM2,699 previously. However, its CPO sales volume declined by 16.3% y-o-y.

Fresh fruit bunch (FFB) production increased to 740,000 tonnes, from 710,000 tonnes last year, with a higher yield of 2.93 tonnes per ha, from 2.81 tonnes per ha in the corresponding quarter last financial year.

Its oil extraction rate (OER) was lower at 20.05%, from 20.1% in 1QFY20.

It noted that the improvement was partially offset by the higher fair value of land lease agreement (LLA) of RM143.75 million against RM57.39 million in 1QFY20. It also recognised fair value losses on derivatives of RM15.14 million, compared with a gain of RM57.39 million a year ago.

As for its sugar segment, it posted a profit of RM50.68 million, compared to a RM27.89 million loss in 1QFY20 due to improved margin achieved as a result of better capacity utilisation and lower finance costs.

On its prospects, FGV said while it expects CPO prices to remain high, the operating environment in the plantation sector will remain challenging due to the Covid-19 pandemic and tight labour situation.

“Our sugar business remains optimistic on its turnaround plan and the ability to achieve sustainable growth with additional focus on export. Domestic sugar consumption is expected to remain stable due to the Movement Control Order.

"Logistic business will continue with strategies to improve sales volume, margins and operational efficiencies,” it said.