Wednesday, June 4, 2014

FGV - full control of FHB

It will benefit from its plantation acquisition of PUP and full control of FHB in 2014. The coming year will see the group harvesting the low hanging fruits of its recent acquisitions.

The PUP acquisition has already started contributing to FGV’s bottom line in the fourth quarter of 2013. As most of its trees are at a prime age of 13 years, there will be minimal replanting costs incurred for the next 10 years from 2014.

PUP accounted for 20% of FGV’s plantations business in Feb 2014.

The current year will also see the plantation group book earnings from FHB, whose status has changed from an associate to a fully owned unit on Dec 27 2013.

FHB generated a consolidated profit before tax of rm383 million in 2013 and had a net cash position of rm1656.6 million.

The full year earnings of FHB will be reflected in FGV’s financial performance in 2014.

As FGV still has a balance of rm1.33 billion from its IPO coffers and cash reserves of rm3.7 billion, it is in a strong position to pursue M&As.

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