FGV Annual Report 2020

Business prospects were dampened due to suspension of business operations, broad-based travel restrictions, and disruptions in global supply chains. The affected businesses include: Bulking: • Decline in demand from our major export markets due to port closures at some of our destination markets • Space constraints due to higher stock levels caused by delayed deliveries • Reduction in biodiesel handlings due to low diesel price affecting biodiesel demand Transport: • Delayed in acquiring strategic projects including Oil and Gas segment • Successful tenders were being cancelled, and some were delayed and postponed to 2021 • Limited movements in/out jetty due to COVID-19 pandemic restriction orders Information & Communication Technology (ICT): • Project deliverables and tenders were put on hold by the Government • Existing projects that are affected by MCO need to have revision on the timelines and costs • Winning new potential projects will be delayed due to postponement Travel: • Cancellation of Umrah & Hajj - Core revenue generator for Travel business • Interstate travel restrictions affecting Hotel Seri Costa’s business • Travel ban imposed by the Government affecting ticketing business To navigate through this crisis, our logistics arm remained resilient in enhancing our capabilities and capacities by expanding tanks storage and warehouses, adding various types of new fleets, obtaining Halal Logistics certification, securing mega Government ICT projects, forming strategic partnerships and venturing into e-Commerce businesses The LO Business continues to play an integral role in supporting our core business by ensuring product distributions, supply chain capabilities and integrating technologies to boost group-wide effectiveness and efficiencies. Overall, LO has shown positive performances despite the adverse conditions brought by the COVID-19 pandemic and Movement Control Order (MCO). Log i s t i cs & others ( LO ) Revenue (RM mil) P/(L)BZT (RM mil) Transport 240 19 229 5 FY2019 FY2019 FY2020 FY2020 Revenue (RM mil) P/(L)BZT (RM mil) Bulking 215 69 201 72 FY2019 FY2019 FY2020 FY2020 Group Business Review FINANCIAL PERFORMANCE For the year ending 31 December 2020, the LO recorded a 14% decrease in revenue to RM303 million compared to RM354 million in 2019. Profit for the year increased by 67% to RM50 million, compared to RM30 million in 2019. With our transport operations, revenue also declined 5% to RM229 million. PBZT declined 74% to RM5 million due to a 5% decline in transport volume and 7% decline in transportation rate. With our bulking services, revenue declined 7% to RM201 million but PBZT grew by 6% to RM72 million. This was due to lower operating costs that were offset by a 5% reduction in the handling rate and 2% reduction in throughput volume. 74 FGV HOLDINGS BERHAD Annual Integrated Report 2020