FGV directors agree to take 20 pct fee cut for rest of the year

FGV Holdings Bhd's board of directors has agreed to take a 20 per cent fee cut effective July 2020 until December 2020.

Chairperson Azhar Abdul Hamid (above) said, in addition, employees in senior management will take two days of mandatory no-pay leave and a 20 percent reduction in their car allowances in the same period.

“From the board's perspective, it is only right that we play our role to try to help whatever little that we can,” he told a virtual press conference after FGV Holdings’ 12th annual general meeting today.

Azhar said cost-cutting measures had to be put in place as the company grapples with the financial impact of the Covid-19 pandemic.

The company has further streamlined its cost profile to improve the bottom line, and conserve cash flow to shore up the finances, he said.

These measures are on top of the ongoing rationalisation plan to reduce manpower costs by 10 per cent over a three-year period from 2019.

For the first quarter ended March 31, 2020 (Q1), FGV’s net loss widened to RM142.34 million from a net loss of RM3.37 million in the same quarter last year.

Revenue declined to RM2.78 billion from RM3.27 billion previously, attributed to the dry weather, the Covid-19 pandemic impact on its operations and lower sales following the closure of its five mills in Sabah.

However, group chief executive officer Haris Fadzilah Hassan said the group expected to record better financial results in the second quarter ending June 30, 2020, on the back of improving fresh fruit bunches (FFB) production and better crude palm oil price (CPO).

“We have seen improvement in our FFB production, although it may not be able to make up for the loss in FFB for Q1, but with the favourable prices, it will make up for some of the losses,” he said, adding the company was maintaining the CPO assumptions at RM2,200 to RM2,400 per tonne this year.

Meanwhile, Haris Fadzilah said FGV was also looking to dispose of its non-core and non-performing assets.

“We are still in the process of looking at the non-core and non-performing assets, with more than five assets to be finalised this year.

“Last year, we did about RM120 million and this year, we are anticipating a bit more (to materialise) from the sale of non-core assets,” he added. - Bernama