Felda Global Ventures Holding Bhd (FGV) is looking to become another Malaysian Airlines System (MAS) by suffering multiple losses in the stock market as well as displaying a poor financial performance.

 

“The latest loss incurred by FGVH may signal the start of another winding road to financial collapse just like the Malaysian Airlines System.”

 

DAP's Petaling Jaya Utara MP Tony Pua said FGV’s performance has been “terrible” and has “disappointed investors”.

 

“Last week, Felda Global Ventures Holdings Bhd (FGVH) reported its first quarterly loss of RM12 million for the quarter ending September 2014, since its much-hyped public listing. 

 

“The performance of FGV was terrible because the nine month results only achieved 53 percent of the market consensus full-year profit forecast, thereby significantly disappointing the investors,” Pua ( right ) said in a statement today.

 

He added that among the plantation stocks listed on Bursa Malaysia, FGV was the worst performer in the past six months.

 

“Based on data as at 15 October 2014, FGVH stock price dropped by 29.1 percent compared against its peers - IJM Plantations (-6.3 percent), IOI Corp (-2.7 percent), Genting Plantations (-9.4 percent) and Sime Darby (-1.6 percent).”

 

FGV’s productivity levels has also dropped, which according to Pua, the company has blamed on lower rainfall this year. Pua however says that this is not true as the nation’s average palm fresh fruit bunch (FFB) production had increased in the same period.

 

“FGVH actually managed to reduce its total FFB production by one percent in the nine months of 2014 despite having added around five percent of additional mature palm oil area from the RM1.2 billion acquisition of Pontian United Plantations last year. 

 

“FGVH has blamed the decline in productivity on the lower rainfall. However the excuse can barely hold water because comparatively, Malaysia’s average FFB production actually increased by three percent over the same period.”

 

Pua also said that FGV also has made losses from derivative contracts in its Canadian business for the quarter which came to over RM52 million which is the “direct consequence of a drastic increase in exposure to risky and volatile trading instruments”.

 

He also called on Prime Minister Najib Abdul Razak to take immediate action to stem the decline in the company. According to a CIMB report, the company stock has been downgraded from a “hold” to a “sell”.