KUALA LUMPUR: FGV Holdings Bhd’s net profit for the third quarter ended Sept 30, 2023, (3Q23) fell to RM31.98mil from RM241.67mil recorded in the same quarter last year.

       Revenue was lower at RM4.91bil compared with RM6.18bil previously, the group said in a filing with Bursa Malaysia yesterday.

       It said the lower revenue was driven by lower average crude palm oil (CPO) prices realised in the current quarter, while the weaker net profit was due to a decline in the profitability of the plantation sector.

       However, FGV said the lower profit was partially mitigated by the current quarter’s improvement reported in the logistics and other sectors as well as a lower loss posted in the sugar sector.

       For the nine months ended Sept 30, 2023 (9M23), FGV’s net profit fell to RM39.18mil from RM984.93mil recorded in the same period last year, while revenue was down to RM13.99bil from RM19.46bil previously.

       FGV said the lower profit was mainly due to the weaker average CPO price realised of RM3,948 per tonne against RM4,989 per tonne registered in the previous corresponding financial period.

       “This was further compounded by higher CPO production costs ex-mill by 35%,” it said.

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       FGV said the plantation sector continued to experience a decrease in margins in 9M23 within its downstream and fertiliser businesses.“The share of profit from joint ventures declined from RM45.18mil to RM3mil in the current financial period.

       “There was a higher impairment loss of non-financial assets amounting to RM58.94mil, primarily attributable to the impairment of Indonesian plantation assets, compared with RM13.87mil in the previous financial period,” it added.FGV said that in the current market landscape, CPO prices have faced challenges with a decline attributed to abundant vegetable oil stocks in major consuming countries as well as subdued demand.

       “However, a promising outlook emerges for the fourth quarter, projecting CPO prices to range between RM3,800 and RM4,000 per tonne.

       “This positive trajectory is supported by the anticipated impact of El Nino, heightened demand in India driven by Diwali restocking activities and the expanding palm biodiesel industry – all contributing to a bolstered price environment,” it said.