FGV Holdings Berhad has announced its 1Q results for 2023 registering a Profit Before Tax of RM60 million and profit for the period of RM8 million. This is much lower compared to what the group generated in 2022 Q1 of RM499 million and RM366 million respectively.
Revenue came in at RM4.59 billion while the preceding year’s quarter was RM5.85 billion. The Group reported an operating profit before fair value changes in LLA and impairment of RM102 million for the period under review on the back of a challenging business environment, squeezed margins in the Plantation Sector, and increased production costs in its Sugar Sector. Nevertheless, the Logistics Sector recorded higher profits because of improved tank rental income, premium oils, and tonnage carried.
“Despite the subsiding surge in the price of crude palm oil (CPO), as well as other challenges faced by our Group, we are pleased to announce a profitable first quarter for the year 2023. However, the Group expects the upcoming months in 2023 to remain challenging and we plan to capitalise upon this starting momentum to push through the rest of the year and continuously meet the expectations of our stakeholders,” said Dato’ Nazrul Mansor, Group Chief Executive Officer of FGV.
Plantation Sector
FGV recorded an operating profit of RM82 million in the Plantation Sector for the quarter. The Upstream Operations were impacted by lower palm product margins due to a 45 percent increase in CPO ex-mill cost to RM2,944 per metric tonne (MT) resulting from higher manuring, upkeep, maintenance, and labour costs.
“We anticipate improved FFB production this year with additional migrant workers which will positively impact our operational performance. Furthermore, our palm age profile has improved, with an average age of 12.77 years and 39 percent of our plantation areas are classified as prime areas. Those factors will position us well for enhanced productivity and growth in the industry. However, we also remain cautious of adverse weather conditions that could impact our palm oil production, such as the El Nino weather pattern towards the end of the year.” Dato’ Nazrul added.
