FGV records in the third quarter a net loss of RM849 million, mainly due to APL's write-downs – Business News

KUALA LUMPUR: FGV Holdings Bhd recorded net losses of RMB 849.25 million in the third quarter ended September 30, 2018, due to impairment losses of RMB 788 million, much of which comes from Asian Plantation Ltd (APL).

FGV, the world's largest producer of crude palm oil (CPO), announced Wednesday that net losses contrasted with net profit of 41.52 million RMB a year ago.

Its loss before zakat and tax (LZBT) of 911 million RMB for the third quarter included an impairment of 788 million RMB.

"LBZT before impairment amounted to RMB 123 million, which compares to profit before zakat and tax for the previous corresponding quarter was 118 million RMB," he said.

FGV recorded a turnover of RM3.19bil compared to RM4.14bil a year ago.

As a reminder, in 2014, FGV acquired APL for RMB 569.9 million by way of a voluntary offer conditional on £ 2.20 per share, a premium of 294.7% compared to its value. as at 31 December 2013.

"FGV also took over APL's loans for RM 517 million. Thus, the total cost in FGV was 1.1 billion RMB, "he said.

Commenting on the group's plantation sector, he said he "had suffered a loss of 849.8 million RMB, down sharply from a profit of 132.4 million RM in the previous corresponding quarter.

"The weaker performance is attributable to the lower average CPO price, the depreciation of intangible assets of 566 million RMB and the tangible fixed assets of 124 million RMB.

"The share of joint ventures losses was higher, reaching RM60 million. These factors have been exacerbated by the low margins of the R & D division and the decline in the volume of fertilizer sales, "he said.

FGV said that the average price of the OPC realized was 2224 RMB per ton for the third quarter, 16.5% lower than the price of RMB 2665 a year ago.

Fesh fruit cluster (FFB) production fell 12.2% to 1.08 million tonnes from 1.23 million tonnes a year ago.

The oil extraction rate for the sector improved from 19.78% to 20.89%. The ex-factory cost at 3QFY18 increased from RMB 1.541 to RMB 1 777 per tonne.

For the nine months ended September 30, 2018, the FGV recorded FFB yields of 11.13 MT per hectare, which is similar to the previous nine months.

For the nine months, it recorded net losses of 871.15 million RMB, compared to a net profit of 80.48 million RMB for the corresponding previous period. Its revenues fell from 12.66 RMB to 10.23 RMB.