FGV’s extensive vaccination programme for foreign workers nationwide is also on track, group CEO says 

by S BIRRUNTHA / pic by MUHD AMIN NAHARUL

FGV Holdings Bhd is expecting the pro-longed acute labour shortage issue and operational disruption that affected the group’s productivity to be settled by the second quarter of financial year 2022 (2QFY22). 

FGV group CEO Mohd Nazrul Izam Mansor said the recent announcement by the government to bring in 32,000 foreign workers into the country which will boost labour coverage at the group’s plantations which currently stands at only 70% of its total requirement. 

“FGV’s extensive vaccination programme for our foreign workers nationwide is also on track. 

“We expect to achieve 100% completion of two doses for all workers very soon in ensuring a safe working environment at our plantations,” he said during the media briefing of FGV’s third quarter ended Sept 30, 2021 (3Q21) results announcement yesterday. 

For 3Q21, FGV’s net profit soared 191.8% year-on-year (YoY) to RM399.39 million on the back of higher revenue as a result of higher crude palm oil (CPO) prices. 

Revenue for the quarter surged to RM5.32 billion from RM3.99 billion a year ago. 

In line with the higher CPO price, FGV noted that the significant improvement in its earnings was also attributable to the improved performance from all sectors and lower fair value charge on land lease agreement. 

The group registered a higher earnings per share of 10.90 sen for the period. 

On a segmental basis, FGV’s plantation sector registered a higher profit of RM902.82 million for 3Q21 compared to RM127.31 million in 3Q20. 

This was mainly attributable to the higher average CPO price realised of RM3,475 per metric tonne (MT) against RM2,536 per MT registered in 3Q20, and despite lower CPO sales volume by 16.6% which was in tandem with lower fresh fruit bunches processed. 

The group’s sugar business registered a profit of RM91.91 million in the period compared to RM110.75 million loss in the previous corresponding period, supported by the improved margin from higher average selling price and gain from liquidation of excess raw sugar hedges of RM30.96 million. 

Profit from its logistic division increased by 13% on higher throughput and other income, while IT and others division registered lower loss by 45% underpinned by lower depreciation cost in IT business and reduced promotional activities in travel business due to interstate travel restrictions and closure of national border under Movement Control Order. 

For the cumulative period of nine months (9M21), FGV’s net profit surged to RM702.79 million from RM15.09 million in 9M20, while revenue climbed by 33% to RM13.39 billion from RM10.07 billion in 9M20.
FGV views the Covid-19 pandemic as a highly important risk considering the group’s estates and mills could be closed due to Covid-19 cases even though almost all our workers have been vaccinated.

“The board takes cognisance of the shortage of workers within the palm oil industry which is currently impacting production, hence will continue to support high CPO price,” it noted.

Mohd Nazrul said in line with the group’s commitment to becoming a net-zero business by 2050, FGV is embarking on a group-wide climate action plan across its operations to fight climate change. 

FGV has developed an integrated climate action plan based on six key strategic factors, namely climate governance and risk management, carbon management, operational efficiency, waste management, water management and climate awareness. 

FGV is Malaysia’s first food and agribusiness company to formalise the commitment by signing the United Nations-backed Science Based Target initiative Business Ambition for 1.5°C pledge, which calls for limiting global warming to 1.5°C. 

“Through this commitment, we will be adopting science-based targets as our carbon management. 

“Although this is the minimum target that we are committed to, we are finalising our comprehensive greenhouse gas inventory in setting up an ambitious reduction target for the group,” he said. 

Shares of FGV closed two sen or 1.37% higher at RM1.48 yesterday, valuing the group at RM5.40 billion.