FGV Holdings Bhd posted a net loss of RM23.2 million in the second quarter (2Q) ended June 30, 2018, as compared to a net profit of RM37.3 million made in 2Q17, due to lower contribution from the plantation sector.
Revenue decreased by 18.4% year-on-year to RM3.44 billion on lower productivity and average crude palm oil (CPO) price realised, higher production costs and higher share of loss from joint ventures and associate companies. For the quarter, the plantation sector suffered a loss of RM6.53 million, a steep decline from a profit of RM159.88 million in the previous corresponding quarter.
The board anticipates a challenging year given the bearish CPO price outlook, operational inefficiencies and unrealised returns from investments. “It is the board’s view that with a performance centric management team, FGV will be able to extract much more value from its assets than it has in the recent past. Right now, there are several leaks that have to be plugged and process improvements, which when implemented, will lead to immediate bottom-line improvement,” chairman Datuk Wira Azhar Abdul Hamid said in a statement yesterday.
The firm noted its internal forensic audits and investigations, launched in January 2018, has outlined some of the findings involving six transactions or investment decisions in which it is reviewing all the recommendations and has sought legal advice on possible legal course.