FGV Annual Report 2020

SUGAR Bus i ness In 2020, the MCO restrictions resulted in weaker demand, especially from the F&B, commercial and industrial businesses that were affected by the COVID-19 pandemic. This then caused our inventory levels to rise in the first half of 2020, and they stabilised during 2H2020 when the MCO was relaxed and the economy showed signs of recovery. Financial Performance In 2020, the Sugar Business posted lower losses compared to 2019 due to better gross profit margin resulting from lower raw sugar and refining costs. Nevertheless, the full year results were affected by write-off and impairment of bearer plants amounting to RM63 million (2019: RM147 million). MSMMalaysia Holdings Berhad (MSM) is the world’s eighth largest sugar refiner by capacity, andMalaysia’s top sugar producer with about 60% share of the domestic market. Total production capacity for 2020 is 2.14 million MT. However, the current capacity has been further reduced to 2.05 million MT following cessation of operation in MSM Perlis Sdn. Bhd. on 30 June 2020. P/(L)BZT (RM mil) -316 -35 FY2019 FY2020 Revenue (RM mil) 2,007 2,185 FY2019 FY2020 Group Business Review 72 FGV HOLDINGS BERHAD Annual Integrated Report 2020