FGV Holdings Bhd’s net profit for the first quarter ended March 31, 2023 (1Q23) plummeted by 96.7% to RM12.09 million compared to RM369.24 million in the previous year.

The significant decline was primarily due to lower average crude palm oil (CPO) prices and losses in the sugar sector.

However, FGV reported that the decrease in profit was partially offset by improvements in the logistics sector.

The company’s quarterly revenue also dropped by 21.5% to RM4.59 billion from RM5.85 billion in the previous period, , it told the bourse in a filing today.

In terms of segments, FGV’s plantation sector profit decreased to RM61.89 million from RM517.87 million in the previous year. This decline can be attributed to the lower average CPO price realised, which dropped from RM5,058 per tonne to RM3,988 per tonne.

The sugar sector experienced a higher loss of RM31.73 million compared to RM30.78 million a year ago, primarily due to higher input costs, such as natural gas, and a weakened ringgit, along with lower sales volume despite an increase in the average selling price.

However, the logistics and other sectors reported a higher profit of RM37.64 million compared to RM21.92 million in the previous year, driven by increased handling rates and tonnage carried.

FGV’s group CEO, Datuk Nazrul Mansor, acknowledged the challenges that lie ahead for the group in 2023 but expressed the aim to build on the momentum of the first quarter and meet the expectations of stakeholders.

Nazrul also anticipated improved fresh fruit bunch (FFB) production for the year, thanks to additional migrant workers that would positively impact operational performance.

He pointed out the group’s improved palm age profile, with an average age of 12.77 years and 39% of plantation areas classified as prime areas, as factors that would enhance productivity and growth in the industry.

However, Nazrul also highlighted the need for caution regarding adverse weather conditions, such as the potential impact of the El Nino weather pattern towards the end of the year. – TMR / pic TMR File