5 ANNUAL INTEGRATED REPORT 2021 ADDITIONAL INFORMATION HOW WE ARE GOVERNED REINFORCING SUSTAINABILITY FINANCIAL HIGHLIGHTS Financially, great strides were made in 2021 as FGV delivered the highest financial performance since its listing. The Group’s revenue rose 39% year-on-year (y-o-y) to RM19.57 billion, Profit Before Zakat and Tax (PBZT) increased significantly to RM1.71 billion, while Profit After Tax and Minority Interest (PATAMI) increased to RM1.17 billion in 2021. These were attributed to increase in palm products’ margins due to higher average CPO price realised, turnaround of Sugar business and increased volume of high-value products and lower variable operating cost in our Logistics business. On the back of profits made during the year, the Board is pleased to announce a dividend of 8.0 sen per ordinary share, translating to a total dividend payout of RM291.85 million. Further details on FGV’s financial performance can be found in the Group Financial Review on page 48. OPERATIONAL HIGHLIGHTS The surge in the CPO price, averaging RM3,671/Metric Tonne (MT) in 2021, led to Plantation Sector’s profit rising to RM1.60 billion from the higher palm products’ margins gained. Operational improvements are ongoing through extensive replanting to replace old trees and improve our plantation age profile. We continue to record excellence in operational improvements across our estates and mills as attested by the awards and achievements of the year including gold and silver awards under ISO MSOSH certifications for eight estates, winning gold at the Annual Quality Environment Challenge (AQEC), and receiving National Energy Awards (NEA) 2020, under the Renewable Energy (Cogeneration) Category. Labour shortage issues are also being positively addressed. The Government-announced measure to bring in 32,000 migrant workers into the country should help turnaround productivity in late 2022 by boosting the manpower coverage level which currently stand at 68% of the full requirement. The year’s high CPO prices pressured our Downstream margins. However, due to surge in demand for pandemic-related products such as detergents and sanitisers, the Division was buoyed by the good sales volume achieved for oleochemical by-products. Plans are in place for Downstream growth to be sustained by development of new and premium products for a wider export market in the near future. In line with the broadening of FGV’s focus, our Research & Development (R&D) efforts are being extended to support product development across the value chain and provide solutions for operational improvements and increase productivity. Our R&D Division received recognition for high-level quality of laboratory services during the Institut Kimia Malaysia (IKM) Chemistry Night 2020 & 2021. These awards provide higher trust and confidence to industry customers in using our services. Research scope is also being expanded to cover more sustainable innovations such as renewable energy, drought tolerance planting materials, irrigation and slow release fertiliser. FGV’s Sugar Sector recorded a turnaround performance through initiatives to streamline resources, hedge costs, strengthen customer engagement and escalate sustainability commitments. The business made a significant stride in boosting sugar refining margins through negotiations with customers for a higher ASP of refined sugar amidst an environment of rising production costs. FGV’s Logistics & Others (LO) Sector grew their capacity and capability by further expanding transportation and storage assets and services. These investments lay the groundwork to attract business opportunities from other industries in growing our business potential. With the year recording the highest oleochemicals throughput handled at 0.95 million MT, the Sector is showing readiness to attract diversification opportunities. Over the course of the year, FGV’s Integrated Farming venture has fortified the business with three animal feed plants, a dairy processing plant, and three new product brands to carve a distinctive and competitive niche for these businesses. In addition, we have 16 sales distributorships across the country selling 12 types of animal feed, and eight minerals and additives. Together, these allow us to improve our value chain offerings in agribusiness, tap into consumer demands and help the nation close gaps in domestic food supply. Focusing on heightening the brand equity of current star brands in 2021, two videos for Saji cooking oil were launched during the year and this investment has strengthened the position of Saji at 42% refined cooking oil market share and increased sales revenue by 33% from 2020. FGV will be tapping this segment more aggressively to further grow market share and product branding. FGV was also honoured to receive a Gold Excellence Award for Companies with RM2 billion to RM10 Billion in Market Capitalisation, and Silver Special Award for Best Annual Report in Bahasa Malaysia from National Annual Corporate Reports Award (NACRA) 2021. These achievements testify to the good work of our team in delivering a high-quality integrated report that draws attention to FGV’s unique value creation in many parts of our businesses to support investors in decision-making. Further details on FGV’s business operations can be found in the Group Business Review on page 55. GROWING WITH PRIDE While we competitively benchmark our companies against industry leaders, we realise that building organisational capability requires nurturing a more competitive and enterprising workforce that lives up to our corporate values of Partnership, Respect, Integrity, Dynamism and Enthusiasm (PRIDE). To catalyse internal transformation, we are synergising value-creating goals with our employees. One of the key focus was on initiatives and activities to further nurture and cascade the PRIDE corporate culture. Results of an Integrity Assessment Tool (IAT) survey by Institut Integriti Malaysia (IIM) showed that we are making good progress as FGV recorded an improved integrity assessment score of 81% in 2021 from 68% previously. This showed that we have effectively created good awareness on the importance of integrity and inculcated it into the FGV work culture.
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