FGV HOLDINGS BERHAD | ANNUAL INTEGRATED REPORT 2023 43 GROUP FINANCIAL REVIEW In 2023, despite navigating a challenging economic landscape, the Group achieved a commendable revenue of RM19,359 million, alongside a Profit Before Zakat and Taxation of RM336 million. However, this marked a decline from the previous year, primarily attributed to the downward trend in Crude Palm Oil (CPO) prices. Nevertheless, increased average selling prices in the Sugar Division and improved handling rates in the Logistics and Support Division helped partially mitigate this decline. Despite these efforts, the Group experienced a substantial decrease in Profit After Taxation and Minority Interest, plummeting by 92% to RM102 million in 2023, compared to RM1,329 million in 2022. The Group’s financial performance was notably impacted by a decline in profitability within the Plantation Division, reflecting the adverse effects of the lower CPO prices. However, amid this adversity, there were encouraging signs, including improvements in the Logistics and Support Division and a narrowing of losses in the Sugar Division. These positive developments underscore the Group’s agility in adapting to market dynamics and its ability to optimise performance across diverse sectors. DIVISION FINANCIAL REVIEW RM19,359 million 2022: RM25,562 million Revenue RM102 million 2022: RM1,329 million Profit After Taxation and Minority Interest RM645 million 2022: RM2,341 million Operating Profit before Land Lease Agreement (LLA) and Impairment Profit Before Zakat and Taxation RM336 million 2022: RM1,955 million Our Plantation Division registered a Profit Before Taxation of RM292 million in 2023 compared to RM2,118 million in 2022, primarily due to the lower average CPO prices of RM3,901 per MT in 2023 against RM4,832 per MT registered in 2022. Additionally, a 29% increase in CPO production cost ex-mill, combined with lower Downstream and Fertiliser product margins, further impacted profitability. The Division also recorded impairment losses on non-financial assets of RM118 million compared to RM55 million in 2022. These losses were primarily due to impairments on Indonesian plantation assets which were disposed of in November 2023, and on rubber plantation estates. The lower profit in 2023 was partially offset by a lower fair value charge on Land Lease Agreement (LLA) of RM134 million compared to RM353 million registered in 2022. Joint venture’s share of profits declined to RM14 million from RM134 million in 2022. The higher joint venture share of profit in 2022 was influenced by a one-off gain on disposal and the effect of hyperinflationary accounting applied to its joint venture’s subsidiary. Plantation Revenue RM15,747 million 2022: RM22,573 million Profit Before Taxation RM292 million 2022: RM2,118 million Revenue RM3,091 million 2022: RM2,566 million Loss Before Taxation (RM23 million) 2022: (RM177 million) Our Sugar Division recorded a lower Loss Before Taxation of RM23 million in 2023 compared to RM177 million loss in 2022. The narrowed loss was attributed to improved margins resulting from higher average selling prices and sales volume. Additionally, the Division benefited from incentives received for certain packed sugar sold in the domestic market and better capacity utilisation. Sugar Revenue RM479 million 2022: RM389 million Profit Before Taxation RM148 million 2022: RM104 million Our Logistics and Support Division achieved higher Profit Before Taxation of RM148 million in 2023, rose by 42% compared to RM104 million in 2022. The profit from the Logistics segment increased by 12%, driven by improved handling rates in the bulking business despite decreased throughput volume. Additionally, the improved profit in the Support segment was driven by increased income in the Information Technology business. Logistics and Support
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