KUALA LUMPUR: Agribusiness and food company FGV Holdings Bhd reported a net profit of RM86.3 million for the second quarter of 2024 (2Q24), a turnaround from a net loss of RM12.8 million in the same quarter of the previous year.
Revenue increased by 22.7 per cent, rising from RM4.5 billion to RM5.1 billion.
According to its filing with Bursa Malaysia Securities, the growth was attributed to a higher realised price for crude palm oil (CPO), which was RM4,103 per metric tonne (MT) this quarter compared to RM4,000 per MT last year, along with increased CPO sales volume.
Its profit before zakat and taxation rose to RM140.73 million, compared to RM14.39 million in the same quarter of the previous year.
"This improvement was mainly attributed to higher profits in the Plantation and Logistics and Support Divisions," it added.
FGV said its Plantation division registered a profit of RM100.55 million, compared to a loss of RM61.64 million in the same quarter last year.
"The increase in profit was primarily driven by a 23 per cent rise in fresh fruit bunches (FFB) production to 0.96 million MT from 0.78 million MT in the corresponding quarter of the previous year, resulting in a higher yield of 3.76 MT per hectare from 2.91 MT per hectare in the corresponding quarter of the previous year," it said.
The profit was further boosted by advancements in the research and development (R&D) segment, primarily due to higher margins and increased sales volume in the fertiliser business, along with reduced losses in the Rubber segment.
Looking ahead, FGV anticipates that CPO prices will remain volatile due to the potential onset of La Niña later in the year, as well as global crop production and fluctuations in vegetable oil stock levels and consumption.
"Demand and supply for palm oil are expected to stay steady in the second half. "Nevertheless, the projected CPO price range for 2024 is expected to be between RM3,800 and RM4,000 per MT," it added.
FGV said it will maintain a focus on yield enhancement within its plantation operations by closely monitoring crop harvesting processes and increasing mechanisation to improve the efficiency of FFB evacuation.
"The group is actively diversifying its FFB supplier base to enhance supply chain stability."
"On the cost side, the drop in fertiliser prices has helped reduce production cost pressures and is anticipated to continue softening throughout 2024," it said.