48 FGV HOLDINGS BERHAD ABOUT FGV MANAGEMENT DISCUSSION & ANALYSIS VALUE CREATION Group Financial Review Revenue Profit Before Zakat and Tax 2020: RM14,076 million 2020: RM346 million 2020: RM837 million 39% >100% >100% 2021 RM19,566 MILLION 2021 RM1,714 MILLION 2021 RM1,842 MILLION PERFORMANCE SUMMARY FGV continued to record an exceptional performance in FY2021 boosted by a 37% surge in average CPO price. The Group recorded revenue growth of 39% and PATAMI of RM1.17 billion, an eight-fold increase from RM146 million recorded last year, the highest profit earned since the Group’s listing in 2012. This was achieved amidst continued operational disruptions caused by the COVID-19 pandemic which had led to severe labour shortages, lower palm oil production, weaker ringgit and increased production costs. The average CPO selling price achieved by the Group of RM3,671/MT compared with RM2,675/MT in the previous year, had led to a record high revenue of RM19.57 billion, from RM14.08 billion in FY2020. Correspondingly, the Group’s Profit Before Zakat and Taxation (PBZT) rose to RM1.71 billion in FY2021 compared to RM346 million from the previous year. The higher PBZT was mainly attributable to the increase in palm products’ margins, turnaround of Sugar business and increase in volume of high-value products and lower variable operating cost in our Logistics business. • Our Plantation Sector recorded significant improvements in profit of RM1.60 billion from RM401.99 million in FY2020. The outstanding positive performance of the Sector was due to increased margin which was in line with the higher CPO price realised and lower fair value charge on Land Lease Agreement (LLA) of RM3.98 million against RM158.49 million registered in FY2020. Impairment loss reduced to RM82.75 million compared to RM215.83 million recognised in the previous year, coupled with better operating margins in the fertiliser and rubber divisions, had further improved the Sector’s performance. • Our Sugar Sector recorded a profit growth in spite of a challenging business environment and increased freight cost which had pressured the overall operating profit margin. The Sector recorded a profit of RM85.68 million, a turnaround from RM34.55 million loss recorded in FY2020. This improvement was primarily driven by the increased margin attributed to higher Average Selling Price (ASP). In the previous year, the results of the Sugar business was also affected by write-off and impairment of bearer plants amounting to RM63 million. • Our LO Sector’s profit improved to RM90.35 million from RM50.49 million recorded last year, due to market expansion that led to an increased volume of high-value products and lower variable operating cost. Operating Profit Before LLA and Impairments
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