FGV Holdings Malaysia expects to see higher profit margins by 2025
FGV Holdings, the Malaysian palm oil producer, said Friday that it expects higher profit margins by 2025. This is due to improved productivity on its estates as well as increased palm prices during the first half year.
Mohd. Hairul Abdul hamid, chief financial officer of the group, said that palm prices will average between 4,300 and 4,600 Ringgit per metric ton during the first half 2025, but they are expected fall in the second.
The company's palm oil crop will produce between 5% to 8% more fresh fruit bunches in 2025.
In recent months, palm oil has been trading at a premium to other oils, due to the disruptions of supply caused by flooding in Indonesia and Malaysia. Jakarta is also working to increase use of tropical oil for biodiesel.
FGV, a major palm oil producer in the world, announced that its 2024 revenue would rise to 22.2 billion Ringgit, up from 19.4 billion Ringgit in 2023. The company also declared a final dividend of 5 cents per share.
FGV's shares were traded at 1,14 Ringgit on Bursa on Friday afternoon. In 2024, their price is expected to drop by 21.05%.
Fakrunniam, in response to a question about the progress made by the company to resolve the U.S. Customs and Border Protection's (CBP) ban on its products, said that it had resubmitted a petition to CBP addressing issues related to the compliance with Malaysian laws.
FGV will be banned by the U.S. Customs in 2020 due to allegations of forced labor on its plantations.
FGV requested the Agency to amend an order that detained its palm oil, and palm oil-related products, as they were suspected of being imported with forced labour.
It said that the company had also hired an audit firm to examine the working conditions of its employees, who are mostly migrant workers. They have also sought to compensate those individuals who paid recruitment fees in order to get jobs. (Reporting and editing by Ashley Tang, Clarence Fernandez, Martin Petty)
(source: Reuters)