Felda Group’s financial position worsened after the listing of Felda Gobal Ventures Holdings Bhd (FGV) now renamed as FGV Holdings Bhd in June 2012. The shares were listed at an issue price of RM4.55.
A total of RM10.5bil was raised from the listing of which Felda received RM6bil while FGV received the remaining RM4.5bil.
In 2012, Felda posted net profit of RM5.8bil due to other income of RM4.7bil. Since then, it recorded net losses of RM2bil (2013), -RM1bil in 2014 and -RM1.1bil in 2015 and -RM700mil in 2016 and this worsened to -RM4.9bil in 2017.
As at Dec 31, 2017, Felda’s liabilities totalled RM14.4bil where RM12.1bil was owed to financial institutions.
Between 2007 and 2011, Felda was in a net cash position at between RM1.8bil and RM3.9bil but this fell to only RM400mil in 2017.
Felda’s revenue was at RM5.9bil in 2010 while its average income was RM3.1bil due to the strong crude palm oil prices which rose to RM3,283 per tonne in 2011.
In 2012, Felda’s revenue fell to RM100mil though in 2013, it was RM200mil while in 2014 and 2015, it was RM400mil in 2014 and 2015. In 2016 and 2017, its revenue was RM700mil.
The decline in the revenue was because FGV was unable to make contribution as much as RM800mil a year as it had anticipated before the IPO and also because CPO prices fell below RM3,000 per tonne since 2012 until now.
In 2017, it posted net losses of RM4.9bil though CPO prices were RM2,790 per tonne compared the net profit of RM1.1bil in 2008 when CPO was at RM2,850 per tonne.
The lend lease agreement did not provide the returns as projected when FGV was listed, instead it had a negative impact on Felda’s financial position.
The net losses of RM4.9bil in 2017 were due to the deterioration in the income from plantation operations due to the negative impact from the LLA and also purchase of assets and investments in non-strategic assets like the purchase of assets which were above market price and poor governance.
Felda’s biggest expenses from 2007 to 2017 were for the financing to the settlers and contributions to the state government totalling RM13.1bil and also staff costs of RM2.7bil.
Felda’s financial position was also impacted by the special payment of RM1.7bil to the settlers in 2012. – The Star