KUALA LUMPUR: FGV Holdings Berhad (FGV) will be paying more attention to its downstream activities as current crude palm oil (CPO) prices are low.
Its Saji brand cooking oil is the market leader with a market share of 30%, Group CEO Harris Fadzilah Hasan said at a media briefing of the company’s Q1 FY19 results here today.
The company recorded a profit before interest and tax of RM78 million, a 19% decline compared with the previous corresponding period.
The lower profit was attributed to lower CPO prices, which averaged RM1,986 per tonne, compared with the Q1 FY18 price which was at RM2,472 per tonne.
The CPO price, which was 20% lower, did not severely affect the company’s profitability mainly because of improved operational performance and lower costs.
“The plantation operations have been focused on tightening procurement processes involving capital and operating expenditure and implementing new tasking systems for infield workers,” said Harris.
The downstream business of the company exceeded internal sale targets primarily due to the implementation of the B10 biodiesel mandate, which came into effect in February 2019.
The company’s sugar business recorded a loss of RM3 million in the quarter compared with a profit of RM22 million in the previous corresponding quarter. This was mainly due to lower average selling price of sugar.