Felda Global revenue jumps 55.9pc

Felda Global Ventures Holdings Bhd (FGV), the world’s third largest oil
palm plantation operator, posted a 55.9 per cent increase in revenue to
RM2.68 billion for its first quarter ended March 31, 2013.


Its profit before zakat and taxation for the quarter declined by
22.2 per cent to RM218.51 million from RM280.81 million in the
corresponding quarter last year.


Net profit dropped by 25.2 per cent to RM167.06 million from
RM223.21 million in the same period previously, FGV said in a statement
today.


The company said the decline in profit primarily reflected the
effects of lower average crude palm oil (CPO) price realised by the
group of RM2,264 per tonne compared with RM3,205 per tonne in 2012.






Malaysian CPO prices have been trading at around RM2,315 per tonne since
December 2012 compared with last year’s average of RM3,190 per tonne,
which was aggravated by reduced palm products purchases as well as high
inventory holdings in the edible oil consuming countries such as India
and China, it added.


FGV Group President Datuk Sabri Ahmad said in line with other
plantation companies, FGV’s plantation division had also been adversely
impacted.


"However, as an integrated organisation, FGV has the flexibility to
utilise cheaper feedstock in the refineries to offset the effect of
reduced pricing and at the same time compete with other edible oil
producers," he said.


He added that the palm oil industry was expecting a price correction
by the middle of the year especially during the upcoming fasting month
as demand rises.


Sabri said the decline in profit compared with the previous
corresponding quarter was also attributed to other factors including
higher fair value changes in the land lease agreement liability of
RM54.60 million and provision for impairment which amounted to RM13.66
million related to a joint controlled entity.


Sabri said that the government’s decision to launch the B10
biodiesel programme in its effort to stabilise the CPO price was also
timely.


"Taking on this opportunity, FGV had entered into an agreement to
acquire a biodiesel refinery located in Kuantan, Pahang and expects the
plant to be fully operational by mid-2013," he added.


“With our resilient integrated business model and new businesses
developed in the recent years as well as strong asset base, we are
reasonably confident that we will overcome the difficult environment,
and barring any unforeseen circumstances, we are optimistic of the
prospects for the rest of the year,” added Sabri. -- BERNAMA