FGV Annual Report 2013

I hope you will continue to journey with us as we seek to unlock the full potential the Group has to offer and make the most of the vast growth opportunities we continue to see at home in Malaysia and around the globe. A CREDIBLE FINANCIAL PERFORMANCE Despite a challenging global economic environment and pressures on crude palm oil (CPO) prices, I am pleased to announce that the Group was able to deliver a credible financial performance. For the year under review, the Group recorded a PAT from continuing operations of RM1.1 billion, which is a significant 30.2 percent increase from the previous financial year. This was achieved on the back of revenue of RM12.6 billion, which declined marginally from RM12.9 billion recorded previously. The decrease in revenue was attributed mainly to lower average prices of Crude Palm Oil (CPO) and fresh fruit bunches (FFB) realised in 2013 and rising operating costs, notably with the coming into effect of the minimum wage requirement in July. It also reflected a lower contribution from the Group’s associate and joint-venture companies and a loss from discontinuing operations of Bunge ETGO. The Group’s net profit takes into account a gain of RM328.3 million arising from the acquisition of Felda Holdings Bhd (FHB) and a gain of RM494.5 million in fair value changes in the Land Lease Agreement (LLA) liability. For the year under review, FGV’s core plantation segment recorded an increase in profit in 2013 of RM1,181.4 million from RM1,118.7 million posted the previous year, despite the fall in the CPO price, which averaged RM2,333 per tonne in 2013, compared to RM2,843 per tonne in 2012. Our sugar segment has turned around in 2013, with profit growing 23.8 percent to RM387.2 million, on the back of a larger export volume of refined sugar and lower purchasing and processing costs. With a reduction in the cost of sales, a higher gross margin of 20.2 percent was achieved during the year in review, compared with 16.3 percent in the preceding year. The losses incurred by our downstream segment further deepened in 2013 to RM42.6 million from a loss of RM12.04 million registered the previous year, due mainly to negative margins derived from the Group’s downstream activities and some impairment losses taken during the year. Chairman’s Letter to Shareholders Perutusan Pengerusi kepada Pemegang Saham Felda Global Ventures Holdings Berhad 12