FGV’s 1Q net profit rises to RM143.63 million, up 5%

by **Cals** Tue 27 May 2014, 00:34

Business & Markets 2014

Written by Adrian Wong of theedgemalaysia.com

Monday, 26 May 2014 10:08

KUALA LUMPUR: Felda Global Ventures Holdings Bhd’s (FGV) net profit rose 5% to RM143.63 million for the first quarter ended March 31, 2014 (1QFY14) from RM136.72 million a year ago, attributing the gain to the effectiveness of its strategy of acquiring Felda Holdings Bhd (FHB) and Pontian United Plantations Bhd last year.

“Our strategy of acquiring FHB and Pontian United Plantations in the previous financial year (FY13) has proven to be an exceptionally positive and ideal strategy given its impact on our first-quarter results,” said its group president and chief executive officer Mohd Emir Mavani Abdullah in a statement last Friday.

“We are in the midst of reviewing several other prospects, which should strengthen our earnings potential. At the same time, we will continue to manage our costs along with our internal key performance indicators to boost productivity and efficiency in our operations,” he added.

The higher net profit was achieved on the back of a 38.9% increase in revenue to RM3.73 billion from RM2.68 billion in 1QFY13.

“The group’s gross profit margin registered a significant increase to 15.8% for 1QFY14 compared with 10.9% in 1QFY13. This was due to higher crude palm oil (CPO) prices as well as improved oil extraction rates (OER) from the plantation segment,” said Emir.

The plantation segment delivered a higher average CPO realised price of RM2,584 per tonne for 1QFY14 from RM2,264 per tonne a year ago, while OER was 20.98% compared with 20.51%.

Emir said the group is optimistic that FY14 will be a “good one”.

“We have been able to improve our pricing strategy for CPO on the back of a steady global market demand.

“As we have indicated before, our intention is to bolster our earnings base via organic or inorganic strategies, such as acquisitions, and we are beginning to see these strategies bear fruit,” he said.

In a separate filing with Bursa Malaysia last Friday, FGV said its unit FGV Cambodia (L) Pte Ltd had teamed up with Co-Op Village Co Ltd to set up a rubber processing factory in Cambodia.

This article first appeared in The Edge Financial Daily, on May 26, 2014.