Felda Global Ventures Holdings Bhd’s (FGV) profit before tax and zakat for the first quarter ended March 31, 2015 fell 80.9 percent to RM51.17 million from RM268.01 million in the same quarter in 2014.
Revenue decreased to RM2.96 billion from RM3.73 billion previously, said chief financial officer Ahmad Tifli Mohd Talha.
“Our first quarter results were affected by the anticipated low production of fresh fruit bunches and downtrend in crude palm oil (CPO) prices which are also affecting most plantation-based companies,” he said.
Speaking at a media briefing in Kuala Lumpur yesterday, Ahmad Tifli said CPO prices dropped 12 percent to RM2,279 per tonne from RM2,584 per tonne in the first quarter of 2014.
Severe flooding at the end of last year and early 2015 had impacted the group as 50 percent of its plantations are located in the three states most affected by the floods, he said.
“Our fresh fruit bunches production volume declined 20 percent to 930,000 tonnes from 1.16 million tonnes year-on-year due to severe flooding early this year,” he said.
Although Felda Global Ventures expects the rest of its financial results to be in line with the industry, Ahmad Tifli said it will take several initiatives to enhance revenue generation, including continous improvement to contain costs and enhance productivity in estates and factories.
In the meantime, he said, the company has set its sights on either the upstream or downstream palm oil sector both locally and overseas, with the intention to either merge or acquire (M&A) to expand revenue base.
“We have the financial strength to do an M&A. Currently the group has RM2.9 billion cash and a gearing level of 0.7 times, and is ready to issue Sukuk to raise funds if required.
“We are also investing in brownfields in the region to accelerate improvements in our crop age profile,” he added.
- Bernama
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