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Malaysia's Felda Global Ventures posts Q1 profit on higher palm oil output
[KUALA LUMPUR] Malaysia's Felda Global Ventures Holdings Bhd, the world's third largest palm plantation operator, reported a small first quarter profit on Wednesday, up from a loss a year ago, on increased production and lower costs.
Net profit for the quarter ended March came in at RM2.5 million (S$809,000), compared with an RM81.1 million net loss in the same quarter a year ago.
Revenue rose to RM4.32 billion, versus RM3.8 billion last year.
Felda Global said its upstream operations recorded a 16 per cent year-on-year increase in crude palm oil (CPO) output, while production costs fell 5 per cent.
"We expect average CPO price to be around RM2,550-2,750 per tonne for the second half 2017," Zakaria Arshad, Felda Global's chief executive, said in a statement released during the midday break on the Kuala Lumpur stock exchange.
The benchmark palm oil price has fallen from around RM3,100 at the start of 2017 to around RM2,509 at present due to rising output as the crop damaging effects of a dry weather El Nino wear off.
Zakaria's price forecast was based on expectations of rising output of fresh fruit bunches from Malaysia and Indonesia, the world's top two palm oil producers.
Malaysia's overall production this year, however, is expected to be below 2015 levels due to acute labour shortages, which "could moderate the bearish CPO price outlook," he said.
Felda Global was working to secure a sufficient labour force and working on increased mechanisation, he added.
Before the break, Felda Global's shares were down 5 per cent, underperforming a 0.02 per cent dip in the benchmark index.