At least 5 sen dividend from FGVH, says Felda chairman

The new management should prioritise maximising returns and increasing dividends

By P PREM KUMAR & D KANYAKUMARI / Pic By AFIF ABD HALIM

Felda Global Ventures Holdings Bhd’s (FGVH) new management must strive to deliver at least a five sen dividend payout rate for this financial year and ensure rising returns to shareholders in the future.

Federal Land Development Authority (Felda) chairman Tan Sri Shahrir Abdul Samad said FGVH chairman Datuk Wira Azhar Abdul Hamid and president/CEO Datuk Zakaria Arshad’s main focus should be on maximising returns.

“I would like them (the new management) to be a good businessman. They need to run it (FGVH) as a business.

“They should prioritise maximising returns and increasing dividends. I have said I would like to see five sen dividend,” he told The Malaysian Reserve.

According to FGVH’s website as of end of August 2017, Felda owns 21.25% stake while Felda Asset Holdings Co Sdn Bhd has 12.42% interest in the planter. Other major shareholders are Lembaga Tabung Haji and Retirement Fund Inc with 7.71% and 6.86% interest respectively in the company.

FGVH’s fortune has gone south since its listing, which was the world’s second-largest initial public offering in 2012.

When it was listed in 2012, it had a cash pile of more than RM5 billion.

The reserve, however, had dropped to RM1.87 billion as of March 31 this year.

In the first year after its listing, the company paid a 14 sen total dividend to shareholders. In 2015, FGVH declared a dividend of four sen per share. Last year, the planter declared one sen final dividend.

Profit at one of the world’s largest plantation company had plunged in recent years mainly due to the drop in crude palm oil (CPO) price.

Last year, FGVH recorded a net profit of RM29.6 million on a RM17.2 billion revenue, compared to RM188.7 million profit and RM15.5 billion revenue for 2015.

Meanwhile, Shahrir said Felda is looking to dispose of more assets to improve its cashflow.

“In any organisation, business organisation, or an organisation like Felda, we have to keep looking at increasing the cashflow,” he said.

On Oct 13, Felda announced that they were putting the Grand Plaza Serviced Apartments in London for sale as part of its initiatives to reorganise and restructure its assets, in order to strengthen its financial position. Felda had reported two consecutive fiscal years of losses after the public listing of FGVH in June 2012.

According to the statutory body’s annual reports, Felda, at the group level, incurred a net loss of RM1.04 billion in 2014, narrowed by 48% from RM1.99 billion in 2013.

These losses have resulted in Felda’s accumulated funds dropping by 16.46% to RM13.47 billion as at end-2014, from RM16.12 billion in 2012.

Felda has not presented its 2015 audited account to Parliament, to which Shahrir said, it is in the process of auditing and will be made public by March 2017.

Meanwhile, between January 2013 and 2016, FGVH completed seven acquisitions. The president and CEO during this period was Datuk Mohd Emir Mavani Abdullah and the chairman Tan Sri Mohd Isa Abdul Samad.

On June 7, the Malaysian Anti-Corruption Commission began investigations into FGVH after Zakaria urged the investigation of alleged improprieties in the firm, and asked the com- mission to probe the parties behind several transactions.

The government had appointed Tan Sri Sulaiman Mahbob as acting chairman of FGVH on June 20, taking over from Mohd Isa, who was made acting chairman of the Land Public Transport Commission.

FGVH’s board added two new directors and one alternating director in June, all of whom hold office with parent Felda.

Azhar was appointed as the new chairman of FGVH to replace Sulaiman who was redesignated as a director.

Azhar, a former MD of Malakoff Corp Bhd, is no stranger to the plantation sector, having had a stint at Sime Darby Bhd as its executive VP of the plantation and agribusiness division, and as its acting president and CEO from May 2010 to June 2010.