KUCHING: Felda Global Ventures Holdings Bhd (FGV) third quarter financial year 2014 (3QFY14) revenue rose 34.3 per cent year on year (y-o-y) to RM4.3 million.
MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) noted that cumulatively, nine month FY14 (9MFY14) revenue improved 36.4 per cent y-o-y to RM12.1 million.
“The strong growth in 9MFY14 revenue was mainly attributable to higher average crude palm oil (CPO) price realised, increase in operating expense ratio (OER) from 20.34 per cent to 20.96 per cent, and the effect of 100 per cent consolidation of Felda Holdings Berhad (FHB) into FGV,” said the research house.
Despite stronger revenue growth, FGV posted a loss of RM9.3 million in 3QFY14. The significant drop was largely due to higher fair value losses in LLA liability of RM98.9 million, unrealised losses from commodity contracts in Canadian crushing business, and negative margin for RBD products.
MIDF Research added that the losses in 3QFY14 brought the cumulative 9MFY14 earnings lower dragging expectations. Excluding the LLA liability and other one-off items, FGV’s core net profit for 9MFY14 earnings grew more than 100 per cent y-o-y.
For 9MFY14, profit from plantation segment fell 13.1 per cent y-o-y due to higher LLA fair value charge of RM317m vis-à-vis fair value gain of RM135 million in 9MFY13.
Excluding the LLA effect, the plantation segment results increased by more than 100 per cent due to higher average CPO price realized and improvement in the OER from 20.34 per cent in 9MFY13 to 20.96 per cent in 9MFY14.
Profit contribution from its sugar segment via MSM Holdings remains depressed.
“MSM’s 9MFY14 net profit shrunk 20.4 per centy-o-y due to lower export and domestic sales resulting from intense competition particularly from Thailand.
In addition, lower average selling price also eroded profit margin for the sugar business.”