FGV returns to the black in 1Q on higher margin of palm products

KUALA LUMPUR (May 31): FGV Holdings Bhd returned to the black and posted a net profit of RM369.24 million for the first quarter ended March 31, 2022 (1QFY22), from a net loss of RM35.42 million a year ago, mainly contributed by higher margins of palm products, the downstream segment, fertilisers and the logistics business.

In a Bursa Malaysia filing on Tuesday (May 31), the plantation giant said quarterly revenue surged by 72.5% to RM5.85 billion, compared with RM3.39 billion previously, backed by higher average crude palm oil (CPO) prices, strong volumes and higher prices of consumer and fertiliser products.

On a quarterly basis, the group’s net profit slid by 20.61% from RM465.09 million for 4QFY21, while revenue fell by 5.34% from RM618.43 million for 4QFY21.

Meanwhile, FGV highlighted that fresh fruit bunch production increased to 0.83 million metric ton (MT), while CPO production increased by 11% year-on-year to 0.56 million MT in 1QFY22.

Commenting on FGV’s financial performance, group CEO Mohd Nazrul Izam Mansor said the planter was pleased to announce another profitable quarter amid the uncertainties and challenges faced by the group.

“We will strive to keep this positive momentum to meet the expectations of our stakeholders and to achieve the targets set for 2022,” Mohd Nazrul said.

Moving forward, in support of the government's food security agenda, FGV will expand its food producing activities, especially in producing fresh produce.

One of the biggest initiatives is with the Baladna Dairy Facility and it will become a large-scale dairy project in Chuping Valley, Perlis.

“[Meanwhile,] in a strategic move to strengthen the nation’s fragrant rice industry, FGV will be bringing more products to cater to consumers' needs, such as SAJI Basmathi and SAJI Aroma (fragrant rice) which will be launched in Mid-June.

“Apart from that, FGV via its subsidiary FGV Integrated Farming Holdings Sdn Bhd has launched ALMA, high-quality animal feed which uses palm kernel cake.

“FGV targets to produce 75,000 tonnes of animal feed this year, a significant increase from 40,000 tonnes produced last year, in an effort to cater for increasing demand in the meat farming industry such as for cattle, goats, rabbits and chickens,” it shared.

At noon break, shares in FGV traded unchanged at RM1.67, giving it a market capitalisation of RM6.09 billion.