KUALA LUMPUR: FGV Holdings Bhd
is projecting a satisfactory performance in the current financial year, in line with the projected crude palm oil (CPO) price movement.
In a note, the group said the palm oil industry anticipates that CPO prices will remain above RM3,800 per tonne in the first half of 2024, before easing as seasonal output recovers.
However, FGV's forecast CPO price range for 2024 falls between RM3,800 and RM4,000 per tonne as the potential shift in la Nina in the latter part of the year could lead to production shortfalls.
FGV said it will continue prioritising yield enhancement activities in its plantation operations. "This involves closely monitoring crop harvesting and expanding mechanisation for fresh fruit bunch (FFB) evacuation," it said in a statement.
It said key initiatives in the segment include the execution of the Withhold Release Order (WRO) Remediation Plan, for which the group has allocated RM605mil over three years to improve worker accommodation facilities, ensuring regulatory compliance and enhancing overall employee well-being.
Meanwhile, the sugar division is expected to increase its utilisation factor by more than 50% following the rectification work at MSM’s Johor refinery.
It said the improvement will reduce production costs and enhance the overall profitability of the division. The rectification will also enable the division to meet growing demand and strengthen its position in the export market.
In the logistics division. the group is exploring market expansion opportunities by increasing its bulking capacity and managing a higher volume of high-value products, including premium and renewable energy products.
"This strategy involves diversifying product handling to mitigate the impact of fluctuations in palm production on overall tonnage," said FGV.
In the first quarter ended March 31, 2024, FGV posted a net loss of RM13.49mil as compared to a net profit of RM12.09mil in the same quarter in 2023.
It said the loss was mainly owing to the loss incurred in the plantation division, although this was partially mitigated by improved performance in the sugar and oils and fats divisions.
The group recorded a loss per share of 0.37 sen against an earnings per share of 0.33 sen previously.
Revenue in 1QFY24 was RM4.54bil, on a par with RM4.59bil in 1QFY23 on the back of the lower average CPO price realised of RM3,907 per tonne in the current quarter.
According to FGV, its plantations division registered a loss of RM62.14mil due to a significant increase in the fair value charge on the land lease agreement, which rose to RM86.04mil from RM32.16mil in the 2023 quarter.
