FGV Annual Report 2016

ANNUAL INTEGRATED REPORT 2016 141 FINANCIAL REPORT GROUP CHIEF FINANCIAL OFFICER'S STATEMENT Dear Shareholders, The adverse conditions from 2015 continued into 2016 resulting in a challenging operating environment for the Group. While we have remained resilient during this difficult year, we managed to deliver on our target of maintaining revenue growth and also managed to implement initiatives to further consolidate our position. OVERVIEW OF FINANCIAL YEAR 2016 Our performance in 2016 was affected by adverse plantation yields due to a longer than expected El Nino weather phenomenon, a volatile forex market and a general slowdown in the global economy. Uncertain demand from key CPO markets also lowered CPO prices with the commodity only recovering to the RM3,000 threshold in the last month of 2016. Volatility in prices also affected our trading activities, particularly in our ability to hedge our forex exposure. In light of these changes in the external environment, senior management implemented a number of initiatives to shore up our position. As a direct result of these initiatives, we were able to achieve the following: i. Administrative cost savings of approximately RM131.37 million ii. Reduced palm estate cost by RM36.80 million without compromising GAP iii. Opened new product markets in China, Indochina, Indonesia, the Philippines and Russia These initiatives have made a direct contribution to our 2016 financial performance and will continue to yield positive results for the Group going forward. AHMAD TIFLI DATO' HAJI MOHD TALHA GROUP CHIEF FINANCIAL OFFICER