KUALA LUMPUR (March 6): The Federal Land Development Authority (Felda), which posted a net loss of RM1.01 billion in 2022, almost double of the amount it bled in 2021, faces financial challenges to meet its debt obligations, according to the Auditor-General’s Report on Federal Agencies for 2022.

The annual net loss of RM1.01 billion was sharply higher than the RM545 million net loss it suffered in 2021, despite strong crude palm oil prices.

The AG highlighted that Felda’s loan repayment commitment amounted to RM1.561 billion compared to its cash balance of RM808 million as at end-2022.

“Felda is unable to fulfill commitments amounting to RM753 million,” the report said

“Felda relies on the government and financial institutions for operational costs and liabilities, highlighting potential challenges in meeting these financial obligations,” said AG in the report.

The Auditor-General urges Felda to reduce its reliance on the federal government for financial assistance.

The report recommended Felda to establish a clear operational direction, ensuring robust financial performance without over-reliance on federal government assistance.

Additionally, Felda is advised to closely monitor the operations and financial performance of its subsidiary companies, ensuring sustainability, viability, and providing appropriate returns without relying heavily on the parent agency.