KUALA LUMPUR: This year looks set to be a time for Felda Global Ventures Holdings Bhd (FGV) to stage a firm recovery, its top executive suggested.
FGV president and chief executive officer Datuk Zakaria Arshad said the world’s biggest crude palm oil company had seen better yield in the first three months, which subsequently boosted its bottomline.
Its fresh fruit bunches (FFB) posted higher yield of 29.2 per cent and 27 per cent respectively in January and February alone, Zakaria said.
“We are seeing good numbers in the first three months and we expect this momentum to sustain.
“We are on track on our (transformation plan) progress and we are seeing good numbers so far although it is too early to be announcing anything but we will continue with our efforts to achieve the yield and profit we aim for,” he told Media Prima Group journalists in an interview last week.
Zakaria acknowledged that the group’s yield was still lower than other plantation companies that do not need to replant.
“In 2017, our yield was 15.75 tonnes per hectare. Our target is 17.75 to 18 tonnes per hectare this year, a jump of between 15 and 20 per cent this year.
”By 2020, we aim to achieve about 20 to 21 tonnes per hectare. We are confident of achieving higher than anticipated target in the first quarter this year along with the rest of the year,” said Zakaria.
Asked on what investors and settlers can expect from the group this year, he said FGV will be able to churn out better profits in 2018 based on its first quarter’s numbers.
“In 2018, the public can expect better profits from FGV. We plan to underpromise and overdeliver. Our target is to achieve more than we projected.
“When I say our progress is on track, it means what we are already achieving more than we planned to achieve. We shall see for this year.
“For January and February, we already achieved higher FFBs, and in March, we think we may achieve the same if not more FFB numbers of about 20 to 30 per cent higher,” he added.
On its share price, Zakaria said there are many factors swaying the price and beyond FGV’s control. This includes currency fluctuation, US-China crisis and local political situation.
“For now, I am more concerned about how we can further improve our production and yield of the company. The rest I can’t do much and I would rather focus on what I can control such as our yield and profits.
“Where fundamentals are concerned, I think FGV shares are undervalued. What we focus on is to be competitive with our costs remaining low. As far as share price is concerned, there are too many variables to deal with,” he said.
Zakaria disclosed that several institutional investors had already reinvested on FGV, albeit in small number of shares.
“Seventy per cent of our investors are institutional investors with only 30 per cent being public investors. This is why the share price did not see much acitivity.
“However, we are seeing some buying from institutional investors such as Employees Provident Fund and Social Security Organisation (Socso). This maybe due to higher confidence in our corporate governance practices. We see high potential for the share price to go up,” added Zakaria.
For its year ended December 2017, FGV registered a net profit of RM143.73 million on the back of RM16.97 billion in revenue.
FGV was first listed on the Bursa Malaysia in June 2012 with its market capitalisation standing at RM6.2 billion as at April 6 this year.
Its current shareholders are FELDA, Lembaga Tabung Haji, Kumpulan Wang Persaraan (KWAP), Koperasi Permodalan Felda Malaysia Bhd (KPF) and the Pahang state government.
FGV shares closed 1.17 per cent or two sen to RM1.69 on Friday.