FGV Annual Report 2020

In Conversation with Group Chief Executive Officer How would you describe FGV’s performance in 2020? FGV IS confident in seizing opportunities and realising our potential for the future. by Dato’ Haris Fadzilah Hassan Group Chief Executive Officer Q 1 Dear Stakeholders, the year 2020 has been an eventful one for all of us because of the covid-19 pandemic. It posed various kinds of challenges among many businesses and households, many of whom are end users of various fgv products. During the year, we experienced a decline in domestic and international demand as well as disruptions in many of our business activities. Against these trying circumstances, I am happy to announce that FGV recorded a profitable year. This can be attributed largely to favourable Crude Palm Oil (CPO) prices which performed better than in 2019. With this, FGV has turned the corner after two (2) successive loss-making years. FGV is now back in the black. For the financial year ended 31 December 2020, FGV recorded a PBZT of RM346 million compared with an LBZT of RM339 million in 2019. Despite a slow start in 1Q FY2020 due to drought, the Plantation Business managed to register strong results due to higher CPO and CPKO margins from the rise in CPO prices. There were also increases in revenue contributions from higher FFB production, lower production costs, and better OER performance. Our Sugar Business also performed better than the previous year. It recorded strong results in 4Q FY2020 that recorded higher sales volume, lower sugar usage costs, and improved refining costs. However, the full year results were affected by write-offs and impairments in 3Q FY2020. Overall, we narrowed the losses in this business by 89% to RM35 million in 2020. Our Logistics & Others recorded slightly lower profit in 2020, which stood at RM5 million for transport and RM72 million for bulking. During the year, we saw a lower handling and transportation rate that was offset by slightly higher throughput volume and better liquid cargo handling. We anticipate 2021 to be another challenging year, especially with our labour shortages and the volatility of CPO prices that affect our Plantation Business which contributes 82% of the Group’s revenues. We also expect our Sugar Business to continue improving its operating and financial performance. In 2021, our focus will be on new value creation for our downstreambusiness. This is integral to our vision to reposition FGV as a leading agribusiness player. So far, we are on track with the implementation of our strategies and action plans to realise this aspiration. 35 Who We Are How We Operate How We Are Governed Additional Information Sustainability Matters Statement & Discussion By Our Leaders