PETALING JAYA: Felda Global Ventures Holdings Bhd (FGV), which is buying a 37% stake in Indonesian planter Eagle High Plantations Tbk, said net profit for the second quarter ended June 30, 2015 plunged 70% to RM46.09mil from RM151.86mil a year ago.
The weak results were mainly due to lower earnings from palm-related segments.
Revenue in the second quarter came in at RM4.19bil from RM3.87bil a year earlier.
In a filing with Bursa Malaysia yesterday, FGV said that the palm plantation segment recorded a lower profit of RM92.69mil in 2015 compared with last year’s RM324.86mil, mainly due to lower average crude palm oil (CPO) prices.
The group’s fresh fruit bunch production fell 9% to 2.15 million tonnes in 2015 compared to 2.37 million tonnes in 2014, with a lower estate yield of 8.33 tonnes per hectare recorded in 2015 compared to 8.72 tonnes per hectare in 2014.
For the six-month period ended June 30, 2015, net profit dropped to RM49.66mil from RM295.49mil in the previous corresponding period. Revenue also fell to RM6.90bil from RM7.38bil a year ago.
On the outlook for the remainder of its current financial year, FGV said that the oil palm industry remained challenging, with a slowdown in the China economy having wide-ranging consequences for the global oil and commodities markets.
“Year-to-date, Malaysia’s CPO market has experienced weaker exports, which was attributed to softer demand from countries like China, India and the European Union.”
The company also said that CPO faced stiff competition from soybean oil, which has experienced higher production and lower prices.
“The market is very uncertain and given the difficult business environment, the group expects to see no recovery in the market in the second-half of the year. The CPO price is unlikely to rebound.
“Although the CPO price has so far hit the bottom, further downside movement is still possible.
At the group, the transformation plans have been actively carried out to improve efficiencies in the operational value chain from the upstream production up to the downstream operations and consumer goods production.”
Barring any unforeseen circumstances, it said the board of directors was of the opinion that the group’s performance for the current financial year ending Dec 31 2015 would be much in line with the industry and market outlook.
