Shaped By High Standards Of Governance ANNUAL INTEGRATED REPORT 2022 157 Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders Principle C: BRIEFINGS ON QUARTERLY RESULTS Concurrent with the release of the Group’s quarterly results announcement to Bursa Securities, FGV conducts a briefing sessions for the media and analysts to give further insights into FGV’s performance for the period under review. Chaired by the Group CEO or the Group CFO, this platform enables the wider market to better understand the Group’s performance and seek clarifications on any concerns related to FGV. The briefings are normally conducted through face-to-face interaction with the conference call facility to ensure full access to the intended audience. However, unprecedented times called for digital channels to be adopted, with continued communications through virtual briefings. In 2022, the briefings on quarterly results were conducted virtually, where the Group CEO presented the quarterly results to the audience before proceeding with the Question and Answer session. KEY CONCERNS RAISED BY STAKEHOLDERS FGV remains committed in engaging our stakeholders in every possible way by maintaining positive relationships, mitigating risks and enhancing performance. By assessing and prioritising stakeholder concerns, FGV can build strong relationships that are mutually beneficial to the stakeholders in achieving long-term success. Financial and Operational Updates • Based on FGV’s Business Plan 2022 to 2024 (BP24), various Key Strategic Initiatives were set up specifically for each Sector and business unit, which will help to improve FGV’s operations throughout the year: a) Increasing the efficiency of Upstream business via a continuous replanting programme to improve our average oil palm age profile and expand the model plantation concept by replicating the best and lean practices at a larger scale. To date, we have completed 10,858 Ha of felling and 3,232 Ha of planting work following the rescheduling of planting to match seedling readiness and the retendering of the contract to new vendors for a long-term replanting project. b) Improving crop yield and oil extraction rate through a transformational plan by focusing on accelerating replanting using elite planting material, improving infrastructure and mechanisation, full implementation of Good Agricultural Practices (GAP), strengthening the workforce and increasing harvesting efficiency. c) In 2022, FGV expanded the supply of olein and other palm-based products to Cambodia and Vietnam and palm-based shortening to the North American market. Numerous initiatives are still ongoing to expand FGV’s global footprint, including collaborating with reputable partners and identifying new opportunities in new markets to deliver sustainable foods and agriproducts to the world. • Overall, the Group’s PATAMI for 2022 increased by 14% to RM1.33 billion, on the back of RM25.56 billion in revenue. • The Board approved a total dividend payment of 15 sen per share, for a total dividend payout of RM547 million. Our response • The disruption in global and regional supply chains from the Russia-Ukraine conflict caused input shortages and price hikes since the warring countries are the key global exporters of several commodities such as fuel, fertilisers and chemicals. This conflict is a major concern to FGV due to the increase in input costs, mainly raw materials, freight and, natural gas, as well as packaging materials, wages and inland logistics. • Additionally, FGV is also adversely affected by the general inflation and foreign exchange volatility caused by the conflict in the long term. • Fertiliser costs increased by almost 90% over the past year as a result of the disruption in the supply of potash from the conflicting nations, which has had a significant impact on our CPO production costs. • Despite the sanctions due to the Russia-Ukraine conflict, we still maintained a good business relationship with suppliers from Russia while exploring alternative potash sources from other countries such as Canada, Laos, Germany and Uzbekistan. • For our Sugar Sector, the Group remained focused on improving reliability of its refineries in pursuit of higher productivity. While continuing to engage with the government to obtain all required economic support, the Group will ensure that the market has a consistent supply of sugar. Our response Higher Operating Expenses due to the Ongoing Russia-Ukraine Conflict
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