KUALA LUMPUR: Felda Global Ventures Holdings Bhd’s (FGV) net profit soared more than four times to RM143.73 million last year from RM31.47 million in 2016.
This is despite revenue easing 1.5 per cent to RM16.97 billion from RM17.24 billion previously.
Fourth-quarter net profit, however, dropped 31.9 per cent to RM76.57 million, from RM112.46 million a year ago, mainly dragged by the land lease agreement (LLA).
The LLA requires FGV to pay RM250 million plus 15 per cent of its annual profit yearly to its controlling shareholder, Federal Land Development Authority (Felda).
Fourth-quarter revenue declined 17 per cent to RM4.28 billion from RM5.15 billion in the same period in 2016.
Its group president and chief executive officer Datuk Zakaria Arshad said FGV’s 2017 full-year results had improved due to higher palm oil prices.
Its plantation sector saw a big profit improvement to RM554 million from RM234 million previously. This was because crude palm oil (CPO) output went up 12 per cent to 2.99 million tonnes.
FGV harvested 4.26 million tonnes of fresh fruit bunches (FFB) compared with 3.91 million tonnes in 2016, as its oil palm average tree profile has improved to 14.5 years from 14.9 years.
“In executing our strategic transformation plan we saw encouraging results for 2017. We are confident this momentum will continue this year,” Zakaria said at a press conference on FGV’s 2017 results here yesterday.
As the group recruits more workers to improve harvesting efficiency, he expects this year’s FFB output to increase nine per cent to 4.85 million tonnes and production cost to reduce to RM1,562 per tonne via economies of scale.
Zakaria said FGV would continue with its business growth initiatives to save costs and planned to sell off non-core assets.
On its interest to buy oil palm land in Kalimantan, he said the land measures around 20,000ha and the potential acquisition would involve a few hundred millions of ringgit.
“We’re also open to expanding our oil palm landbank to Indonesia and possibly, Africa,” he added.
FGV’s logistics profit jumped almost sixfold to RM45 million last year from RM8 million previously, mainly due to higher throughput in the bulking business, increased tonnage carried by transport operations in tandem with increased crude palm oil production.
However, profit at its sugar business, operated by MSM Malaysia Holdings Bhd, shrank due to a high global raw sugar price and a weaker ringgit against the US dollar last year.
Meanwhile, on January 19, then MSM group president and chief executive officer Mohamad Amri [email protected] claimed he was “constructively dismissed” and had left office.
Zakaria said: “Amri is my close friend. It is unfortunate he chose to leave. I’m persuading him. The window is still open. I hope he will come back to lead MSM again.”
Talk had it that Amri left MSM because he could not get along with an executive director recently appointed to the board.
MSM had denied Amri’s claim and requested him to return to work.
The company has appointed Mohd Shaffie Said as acting chief executive officer.