FGV Annual Report 2017

FELDA GLOBAL VENTURES HOLDINGS BERHAD UNDERSTANDING OUR BUSINESS CONTEXT 24 I am pleased to present the following overview of our key financial metrics and their contributing factors: Group Revenue: -2% YoY • Revenue fell mainly due to lower CPO sales quantity as we reduced the trading of external oil. Group PBZT: +60% YoY • The improved reading came on the back of increased CPO margins due to higher CPO prices, a gain on a disposal transaction, improved share of profits from our joint venture companies, higher RBDPKO margins in the kernel crushing business, as well as higher sales volume and forex gains in the fertiliser business. • These improvements were partially offset by an increase in raw sugar cost of RM2,131 per MT (2016: RM1,778 per MT) and a weaker Ringgit, increase in fair value charge for our land lease agreement, net impairment of receivables and assets of RM118.45 million, and a provision for litigation loss in FGV Trading of RM32.84 million. Plantation Sector’s profit rose to RM554.18 million from RM233.78 million in 2016 mainly on the back of improved Fresh Fruit Bunch (FFB) production, higher margins from Crude Palm Oil (CPO) and Refined Bleached Deodorised Palm Kernel Oil (RBDPKO), and improved share of profits from our joint venture companies. The increase was also contributed by the Sector’s gain on disposal of shares in AXA Affin. Our Valued Shareholders, We continue to make significant progress in the year under review to accelerate our transformation and improve our performance as a globally integrated agribusiness that delivers value to our Stakeholders. FGV registered total revenue of RM16.94 billion for the financial year ended 31 December 2017, a slight decrease of 2% from the RM17.24 billion in the previous year. Nevertheless, total Profit Before Zakat and Tax (PBZT) grew over 60% to RM416.59 million from RM260.30 million in 2016. DATO’ ZAKARIA ARSHAD MESSAGE FROM THE GROUP PRESIDENT/CHIEF EXECUTIVE OFFICER Management Discussion & Analysis EP EP