Kuala Lumpur: FGV Holdings Bhd’s net profit for the third quarter ended Sept 30, 2020 (Q3 2020) rose to RM136.89 million from a net loss of RM262.41 million posted in the same quarter last year.
Revenue increased to RM3.99 billion from RM3.55 billion previously.
In a filing with Bursa Malaysia Tuesday, the group said the better performance was due to higher profit registered in the plantation sector as a result of higher crude palm oil (CPO) price and lower fair value charge of the land lease agreement of RM256.95 million compared with RM278.44 million registered in the previous year.
The increase in group profit was also supported by higher profit in logistics and other sectors and lower losses reported in the sugar sector, it said.
FGV noted that for the period under review, the CPO price averaged RM2,645 per tonne, which was higher than the average CPO price realised in Q3 2019 of RM1,983 per tonne resulting in a significant increase of the group revenue.
“I am pleased to report the second consecutive quarter of positive results for FGV. While CPO production is in line with national production, FGV’s fresh fruit bunch production continues to outpace national production attributed to improving crop recovery and higher mature areas,” said group chief executive officer, Datuk Haris Fadzilah Hassan.
According to FGV, in the upstream segment, FFB production increased by nine per cent to 1.35 million tonnes compared with 1.24 million tonnes in Q3 2019.
The group said its downstream segment, however, registered a lower profit, impacted by the low demand for biodiesel due to the Covid-19 pandemic’s effects and lower share of results from joint-venture companies.
On the other hand, it said the sugar sector’s reduced loss was a result of higher sales revenue attributed to better volume in the industry and export segments as well as higher export premium.
“The improvements of the sugar sector were partially offset by write-offs and impairment of bearer plants due to a fire incident in the Chuping land, Perlis, and a change of accounting treatment on the same assets due to cancellation of sales,” Haris Fadzilah said.
For the the logistics business, FGV said it declined by 12 per cent due to lower bulking throughput, offset by higher volume transported for fast-moving consumer goods (FMCG).
It said transport volume grew by two per cent due to an increase in cargo tonnage carried, while bulking volume decreased by five per cent due to lower throughput from major customers and lower biodiesel handled.
Moving forward, FGV said its strategic plans to further grow and strengthen its high value-added business activities focusing on integrated farming and FMCG are on track, and potentially expedited to provide faster expected returns.
“On the plantation sector, FGV expected both FFB and CPO production in 4Q20 to be impacted by weather uncertainties and partial lockdown in Sabah, with the CPO price remaining strong until the end of the year,” it added.
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