FGV Annual Report 2014

Financial Performance & Industry Outlook 2014 was a challenging year for the palm industry as low Crude Palm Oil (CPO) prices and production affected overall performance. Trading volume under FELMA during the period under review was 5 percent lower at 3.2 million metric tonnes, against the previous corresponding period of 3.4 million metric tonnes. This was due to lower palm production following bad weather in the last quarter of 2014. Weakening crude oil prices meant a lower demand for biodiesel, therefore pushing down demand for CPO. Further, Indonesia maintained its export tax to zero percent in December. Lower palm productions impacted the overall carried volume by Felda Transport as it major revenue is from transporting CPO products via its tankers. Palm Kernel and fertiliser also transported via Felda cargo trucks. FJB Group's operations was not spared – its throughput volume declined by 10 percent to 7.4 million metric tonnes against the previous corresponding period of 8.2 million metric tonnes. TLMO core business recorded a Total Revenue of RM967.1 million with Profit Before Tax (PBT) of RM92.2 million in 2014. The Total Revenue recorded was 63 percent higher than the previous corresponding period while PBT was 24 percent lower. This can be attributed to the liquidation of the paper trading and lower carried throughput volume a cross the core business. Meanwhile, our non-core businesses were less affected by the palm oil industry. Felda Prodata secured major contracts with Felda Group, Malaysian Communications and Multimedia Commission (MCMC), Inland Revenue Board of Malaysia (LHDN), Ministry of Home Affairs (KDN) and others. Felda Travel strengthened its profit largely due to effective cost control initiatives. Felda Engineering also secured several major projects namely Perumahan Generasi Baru Felda, Pahang Phase IV water supply project, Stadium Complex in Bandar Tun Abd Razak, Kuala Lumpur and others. TLMO non-core businesses recorded a total revenue of RM553.0 million for the year under review. This is a 7 percent decrease on the same period in 2013. Profit before tax (PBT) was RM80.5 million, representing an increase of 36 percent from 2013. This was driven by higher value contracts secured by IT and Engineering Services and successful cost control measures that were put in place during the year under review. Overall, despite the challenging business environment, TLMO's Total Revenue was RM1,062 million with Total PBT of RM172.7 million for FYE 31 December 2014. Introduction Performance Highlights About FGV Reports Financial Statements Others Strategy and Value Creation Performance Review & Progress Foreword to Shareholders Annual General Meeting Annual Report 2014 pg 91