KUALA LUMPUR, Aug 29 — FGV Holdings Bhd’s share price slid at lunch break after the company reported weaker financial performance for the second quarter ended June 30, 2023 (2Q 2023).

At lunch break, the company’s shares fell three sen to RM1.39 per unit, with 581,300 shares traded.

According to a filing with Bursa Malaysia yesterday, FGV recorded a net loss of RM12.90 million in 2Q 2023 versus a net profit of RM374.02 million in 2Q 2022, largely due to lower profit registered in the plantation sector.

Revenue for the quarter fell to RM4.50 billion against RM7.43 billion previously on the back of lower average crude palm oil (CPO) price in the current quarter.

In a note today, Hong Leong Investment Bank Bhd said FGV’s results came in below expectations and projected full-year core earnings estimates of RM355.1 million-RM395.4 million, mainly due to lower-than-expected fresh fruit bunches (FFB) output.

It said less favourable weather conditions dragged FFB output lower by 9.7 per cent (at 1.91 million tonnes) during the first seven months of 2023, significantly behind management’s earlier FFB output growth guidance of 5.0-8.0 per cent for 2023.

"As such, we cut our 2023/2024/2025 core net profit forecasts by 57.3 per cent/13.6 per cent/20.9 per cent, mainly to account for lower FFB yield assumptions.

"Despite the downward revision in our earnings forecasts, we maintain our ‘hold’ rating on FGV, with a slightly higher sum-of-parts target price of RM1.51, after taking into account MSM Malaysia Holdings Bhd’s latest share price,” it added. — Bernama