KUALA LUMPUR: Felda Global Ventures Holdings Bhd (FGV) is maintaining its dividend policy of paying out half of its net profits to shareholders, be it in good times or bad, said group president and chief executive officer (CEO) Datuk Zakaria Arshad.
“Since FGV was listed on Bursa Malaysia in June 2012, the dividend commitment to shareholders is to pay out half of its profits. This policy is still ongoing,” he told Business Times after the company’s shareholders meeting held here today.
In its first quarter ended March 2016, FGV slipped into the red with RM70.35 million in losses, compared with RM72.88 million pre-tax profits, a year ago. The losses were dragged by lower oil palm fruit harvest at the estates.
FGV operates more than 431,000ha of oil palm estates across Malaysia and Indonesia.
As the third CEO to lead FGV in its four years of being listed on the stock exchange, Zakaria's priority is restore the group's integrity among the investing community.
“We’re working hard to improve on our bottom line. It has been 60 days since I took office and I’ve gone to the estates to meet my team,” he said.
Zakaria also gave his assurance that his estate managers are working towards a higher fresh fruit bunches (FFB) yield and oil extraction rate (OER) of 19 tonnes per hectare and 21 per cent.
Analysts have pegged that every 1 per cent rise in OER could add FGV’s revenue by RM100 million, based on an average palm oil pricing of RM2,500 per ton.
“Today, I feel grateful that FGV shareholders; institutional and minority investors as well as settlers, pledged their confidence in the transition plans I have outlined to maximise the use of our assets,” said Zakaria.
Today, FGV’s share price is trading at around RM1.35, a far cry from its RM4.55 initial public offering (IPO) price back in 2012.
As FGV’s share price tumbled over the years, those who held on are Felda Group investment arms, the Employees Provident Fund (EPF), Kumpulan Wang Persaraan (KWAP), Permodalan Nasional Bhd, investments arms of Sabah, Pahang, Terengganu state governments and Pertubuhan Keselamatan Sosial (PERKESO).
Zakaria spoke of rebuilding trust, respect and rapport with FGV stakeholders.
“It’s part of my 100-day in office internal target. I’m meeting up with institutional investors, fund managers and analysts to give them a clearer insight into our action plans to improve our bottomline.”
Back in 2012, FGV emerged as Asia's biggest IPO, when it managed to raise RM10.4 billion.
A month before its debut on 28th June 2012, FGV had even secured 12 cornerstone investors. They took up 19 per cent of its IPO while state governments, where the plantation powerhouse's oil palm and rubber estates are located, collectively purchased another 12 per cent.