KUALA LUMPUR: Plantation company FGV Holdings Berhad recorded a loss of RM1 billion before zakat and tax for the financial year 2018 (FY18) due to impairments and provisions.
The company had recorded a net profit of RM131 million in 2017.
For the quarter ending Dec 31, 2018, the company registered a loss before zakat and tax of RM139 million due to impairments and provisions, which amounted to RM240 million during the period.
The company said without impairments and provisions, FGV recorded a profit, before tax and zakat, of RM101 million as opposed to RM253 million it earned the previous corresponding period.
In its 2018 results briefing today, FGV CEO Harris Fadzilah Hassan said the company was also adversely affected by lower crude palm oil (CPO) prices during the year.
For the quarter under review, CPO prices averaged RM2,053 per tonne against RM2,723 per tonne in the previous corresponding quarter.
During the quarter, the plantation sector’s fresh fruit bunch (FFB) production slipped by 3% to 1.15 million tonnes. FFB yield decreased to 4.62 tonnes per hectare from the previous period yield of 4.76 tonnes per hectare.
Oil extraction rate (OER) improved by 4% to 20.7% compared with 19.92% the previous year.
Harris said the company was focused on its turnaround plan which began in October 2018.
“In the fourth quarter, the plantation operations were focused on plugging leaks, revising processes and implementing new controls to bring our estate performance in line with the larger players in the industry,” said Harris.
FGV has plans to replant 15,000ha of land in 2019. It also seeks to improve its tree age profile from 14.3 years currently to 12 years by 2026. Younger tree profile provides for higher OER rates.
The company expected CPO to trade between RM2,000 and RM2,500 per tonne for 2019.