Felda Global Ventures Holdings Bhd’s (FGV) full-year profit before tax for financial year ended Dec 31, 2012 after fair value changes in Land Lease Agreement (LLA) liability hits RM1.26 billion.

In 2011, FGV’s pre-tax profit was RM1.9 billion and this did not include LLA liability or RM210.18 million which only rose in 2012 following FGV’s business model changes.

NONE FGV president Sabri Ahmad (right) said effective Jan 1, 2012, the company’s business model was changed when FGV signed a LLA with Federal Land Development Authority (Felda) involving 347,584 hectares of Felda land, resulting in fair changes in LLA liability being recognised in the income statement.

FGV’s revenue in 2012 stood at RM12.89 billion as compared with RM7.45 billion in 2011.

Sabri said the slide in crude palm oil prices last year affected profit in the fourth quarter of last year.

He said crude palm oil prices were lower at RM2,843 a tonne in 2012 as compared to RM3,218 a tonne in 2011.

“Fresh fruit bunches’ production declined by 251,074 tonnes to 4.91 million tonnes in 2012,” he added.

The group’s sugar segment performance was impacted by an increase in raw sugar costs while performance for the downstream segment improved largely due to a turnaround in Canadian crushing and refining business unit, he said.

“The group’s oleo-chemical business in US had also improved its financial position due to strong demand of fatty acids and glycerine from its key customers,” he said.

Meanwhile, FGV’s upstream plantations contributed 75.2 percent of total revenue.

“The segment reported 77.7 percent rise in revenue, boosted by CPO sales of RM6.9 billion in spite of average CPO prices in 2012, lower FFB production and higher cost of sales,” he said.

Sabri said while concerns on CPO stock overhang continued to plague the industry, expectations of further reductions, increasing demand in the months ahead from major consumer countries taking advantage of the current low prices, and Malaysian government’s intention to implement biodiesel initiatives should help improve CPO price levels.

On price outlook this year, he said, for the first six months it should be positive.

“The price of palm oil is around RM2,400 per tonne today and there is a huge discount with the price of soya oil. Exports to China, India and Europe should bring down stocks,” he said.

Final dividend of 8.5 sen

He said the board has approved a final dividend of 8.5 sen.

This final dividend adds to the interim dividend payment of 5.5 sen paid on Oct 22, 2012 to total 14 sen.

Sabri said FGV declared a dividend payout of 64 percent of profit after tax, higher than the 50 percent payout as promised in the prospectus during FGV’s initial public offering exercise previously.

“The dividend payment is expected to benefit approximately 180,000 shareholders including the majority 112,635 settlers who are FGV shareholders.

He said through the Settler Trust Fund, settlers nationwide will receive RM550 each from payment of of final dividend on 20 per cent of shares held by Felda amounting to RM62.02 million.

“This is in addition to RM40.13 million already paid out in October 2012 from the interim dividend of 5.5 sen, making the total proceeds to settlers from the Settler Trust Fund in fiscal 2012 RM102.15 million,” he said.

- Bernama