No more major impairments ahead, says FGV

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KUALA LUMPUR (Feb 28): FGV Holdings Bhd said it has undertaken the worst of its impairments during the financial year ended Dec 31, 2018 (FY18) and does not expect any more major impairments of a similar scale to be made in the current financial year.

FGV group chief executive officer Datuk Haris Fadzilah Hassan said the group's total impairment for FY18 amounted to RM966 million, largely due to significant impairments related to three companies, namely Asian Plantation Ltd, FGV Green Energy Sdn Bhd and Cambridge Nanosystems Ltd.

He said the impairments related to the three companies totalled over RM700 million out of the total impairment for the year, which had dragged its financial results for FY18, despite making good progress in its turnaround plan.

"We have taken a lot of impairments last year, so hopefully FGV's performance in 1QFY19 will reflect more of the results of our turnaround initiatives," he told the media at a briefing following the release of the group's 4QFY18 results today.

Haris said FGV will hopefully be free of its legacy issues in 1QFY19, adding that there will no longer be any more big impairments in the current financial year.

"I don't think there will be an impairment of this size. This has been a milestone in FGV's history. A lot of the investments put in post-IPO did not give the kind of returns that were expected at the time of investment," he said.

Meanwhile, Haris said there will be some impairments this year related to the Malaysian Financial Reporting Standards 9 (MFRS 9) regulations regarding accounts receivables.

Asked if the group could return to the black in FY19, given that most of the impairments have been done, Haris said: "That's the whole point of the turnaround plan. If the financials don't improve I would be out of the job."