Palm oil maker FGV posts Q3 profit jump, eyes output recovery

11/30/2021 | 07:16am

KUALA LUMPUR (Reuters) -Malaysia's FGV Holdings, the world's largest crude palm oil producer, said on Tuesday its third-quarter profit nearly tripled from a year earlier as prices surged and forecast a return to full output by the second quarter of 2022.

It posted a profit of 399 million ringgit ($95 million) for the July-September quarter, up from 137 million a year earlier.

Revenue rose 33% to 5.3 billion ringgit.

Higher crude palm oil prices offset lower output while its performance in sugar and logistics improved, FGV said in a bourse filing.

"Despite the prolonged acute labour shortage issue and COVID-19 pandemic-related operational disruption which continues to affect the group's productivity, we expect the situation to turn around starting from the second quarter of 2022," said Group CEO Mohd Nazrul Izam Mansor.

He said this was in view of the government's plan to bring in 32,000 migrant workers to alleviate a labour crunch on plantations to help boost production.

Lower yields pushed production costs up by 16% from a year earlier to around 1,700 ringgit ($404.76) per tonne, FGV said.

Mohd Nazrul said the company anticipates production costs will rise further due to significant increases in the prices of raw materials such as fertilisers.

FGV forecast crude palm oil prices to average 4,420 ringgit per tonne this year versus 2,686 last year.

($1 = 4.2000 ringgit)

(Reporting by Mei Mei Chu; writing by Rozanna Latiff; editing by Martin Petty and Jason Neely)

By Mei Mei Chu

© Reuters 2022
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