The government is in denial to say Felda Global Ventures Holdings is on the right track when its plunging profits and share price shows it is gasping for air, Petaling Jaya Utara MP Tony Pua said.

He was responding to Deputy Minister in the Prime Minister’s Department Razali Ibrahim’s written reply to Parliament that FGV enjoying a boost in revenue despite the plunge.

Pua said harping on revenue is no use, because net profit for the year ending Dec 31, 2014 was slashed by 52.7 percent to about half a billion ringgit from RM1.16 billion in 2013.

Worse still, earnings per share tumbled close to 70 percent to a mere 8.4 sen in the same period.

"The (deputy) minister’s response is a clear case of denial syndrome that will be the harbinger of worse things to come.

"His citing of fantastic financial statistics is like a doctor telling a patient that his eyesight remains good, despite detecting severe coronary artery blockage which requires a triple bypass surgery," he said in a statement.

The fact that Razali said 99 percent of settlers are still hanging on to their 800 shares also means that the settlers have collectively suffered a paper loss of RM177 million, he said.

Razali (right) in his written reply to Pua today said of the 94, 125 of the 94,219 settlers who purcashed shares on June 28, 2012 are still shareholders.

Pua asked the ministry for the number of shares purchased by settlers during the IPO and the number of those who have sold the shares.

Pua also asked FGV shares are expected to plunge further following prolonged losses.

In his reply, Razali said operational profits jumped 10 percent to RM1.03 in 2014, group revenue rose 30.8 percent to RM16.4 billion and gross profit rose to RM2.14 billion.

He did not mention the sharp drop in net profit, chiefly driven by a 96 percent year-on-year plunge in the fourth quarter due to one of the worst floods in the nation’s history.

Razali acknowledged that share prices have dropped but said this does not affect growth or operations.

Share prices dropped from RM4.55 at initial public offering to RM2.09 per share at close of trade yesterday.

"FGV’s performance is still on the right track to reach set internal targets," Razali said.

Commodity prices to blame

He added that share prices plunged due to commodity price fluctuations.

FGV is a plantation firm and 75 percent of its earnings comes from commodities, he said.

Crude palm oil prices averaged at RM2,382 in 2014 and is expected to drop to RM2,300 in 2015, he said.

"This pressures are not only faced by FGV but all other palm oil firms," he said.

This seems to be at odds with FGV chairperson Isa Samad's who said it is "unfair" to compare FGV with other plantation companies.

Isa said this last November, when asked on investment bank Kenanga, which placed Sime Darby as its top pick for plantation shares.

Kenanga in its report on nine plantation firms had also said FGV is performing within market expectations.

However, Pua (left) noted that no investment bank in Malaysia today recommends buying FGV shares despite its low prices. 

The MP noted FGV’s "embarrassing" showing is despite government-related funds like the Employers Provident Fund, Pensions Fund and Lembaga Tabung Haji buying large portions of the shares.

"The performance of FGV over the past two and a half years only made the above statement a laughing stock, for not only did the company fail to become a global powerhouse (as promised), it was a trailing laggard even in Malaysia," Pua said.