BY JENNIFER GOMEZ. Published by The Malaysian Insider on 28 Oct 2014.
DAP is calling for a review of Felda Global Ventures Holdings Bhd (FGVH), saying it has failed Malaysians given the recent collapse of the plantation giant's share price.
It said the drop resulted in losses of billions of ringgit for Felda settlers and pension funds such as Employees Provident Fund and the Pensions Fund.
The party's national publicity chief Tony Pua said that the share price had dropped from its offer price of RM5.39 on June 28, 2012, to RM3.67 on September 11 this year.
Pua said this was a shocking 40% decline in price in just over two years, despite the company’s 2012 Annual Report stating that “FGVH's stunning debut on the main market in Bursa Malaysia in 2012 was a global sensation. This is just the start of our metamorphosis into a global powerhouse”.
Pua said that the performance of FGVH over the past two years reduced the statement to a laughing matter.
"It was a big boast, for not only did the company fail to become a 'global powerhouse', it was a trailing laggard even in Malaysia.
"Datuk Seri Najib Razak, as prime minister and finance minister, who promised Felda settlers the stars during the listing exercise, must take decisive action to reverse the decline in the company before the rot continues and becomes irreversible," Pua said at the parliament lobby today.
He said the parliamentary reply given by Deputy Minister in the Prime Minister's Department Datuk Razali Ibrahim two weeks ago that the decline in the share price was because of the drop in the global crude palm oil prices from US$930 (RM3,044) in June 2012 to US$670 (RM2,209) was unacceptable.
"The excuse of the prime minister that the decline in the global CPO price caused the drop in the stock price is unacceptable because the decline in global CPO prices affected all plantation companies, not just Felda.
"And yet Felda's performance was by far the worst among all the plantation companies on the stock exchange."
He said that the company cannot be allowed to fail as it would affect the performance of EPF and also cause a drop in government revenue.
"Felda settlers own 18.9% of the company as well, we cannot ditch it. The company must be rescued and it starts from the management, their performance should be reviewed and under-performers should be removed."
Pua said that in the past six months, FGVH was the worst performer of all plantation stocks listed on Bursa Malaysia and that since mid-October, its price had dropped by 29.1% compared with its peers – IJM Plantations (-6.3%), IOI Corp (-2.7%), Genting Plantations (-9.4%) and Sime Darby (-1.6%).
He added that the closest poor performer to FGVH was KL Kepong, which saw its share price drop by 16.6% during the same period.
Pua said FGVH had the advantage of captive land in the form of settlers’ land with rentals below market rate yet it failed to capitalise on it.
"By right, it should beat the market because it has advantages over other private companies but instead, it has performed badly.”
He said FGVH’s share price was an embarrassment because of the solid support of government-related funds, such as EPF, KWAP, Lembaga Tabung Haji and other state funds.
The share price drop had resulted in losses of about RM1 billion for EPF, KWAP and Tabung Haji, he said, adding that the management failed to generate sufficient returns for the people compared with other companies.
"We do not want FGVH to become another company which is completely dependent on the government like Proton or worse, like MAS.
Link: http://www.themalaysianinsider.com/malaysia/article/dap-wants-felda-global-reviewed-after-plunge-in-share-price#sthash.c5w3pLkM.BYeRqhcw.dpuf
Published by Free Malaysia Today on 28 Oct 2014.
DAP publicity chief Tony Pua today questioned the Finance Ministry’s honesty in explaining why the share price of Felda Global Ventures Holdings Bhd (FGVH) had dropped 40% in just two years.
He noted that the price had fallen from the initial offer of RM5.39 on June 28, 2012 to only RM3.67 last Sept 1 although KLCI had appreciated from 1,599 to 1,855 points over the same period.
Referring to the Finance Ministry’s explanation that the decline was due to the drop in the global price of crude palm oil from $930 to $675, Pua said this was a “less than honest” answer to a question he posed in Parliament.
If that was the case, he said, then other plantation companies would have been afflicted with a similarly poor performance.
Read more here:
http://www.freemalaysiatoday.com/category/nation/2014/10/28/govt-fails-to-give-real-reasons-for-fgvh-price-drop/
http://www.freemalaysiatoday.com/category/nation/2014/10/28/govt-fails-to-give-real-reasons-for-fgvh-price-drop/
Relevant posts:
FGVH, 3rd largest IPO in Malaysia, shares dropped again!
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http://www.theedgemarkets.com/en/article/felda-global-3q-net-loss-rm9-mil-revenue-higher-rm432-bil
ReplyDeleteKUALA LUMPUR (Nov 27): Felda Global Ventures Holdings Bhd (FGV) slipped into the red for the first time since its listing on June 26, 2013, posting a net loss of RM9.33 milion for the third quarter ended Sept 30, 2014 (3QFY14) from a RM22.9 million net profit a year ago, dragged down by higher commodity futures trading losses and fair value changes in land lease agreement (LLA) liability.
In a statement to Bursa Malaysia today, FGV said higher finance costs and taxes also led to the group's first quarterly loss.
Revenue for 3QFY14 was, however, higher at RM4.32 billion, versus RM3.22 billion a year ago.
FGV said commodity trading losses for 3QFY14 rose to RM105.5 million from RM237,000 a year ago, while fair value changes in LLA liability increased to RM98.9 million from RM41.05 million.
Felda Global's cumulative nine-month net profit fell to RM286.16 million, from RM482.33 million a year earlier. Revenue however climbed to RM12.13 billion, from RM8.89 billion.
In a separate statement, FGV Group President and Chief Executive Officer Datuk Mohd Emir Mavani Abdullah said 3QFY14 revenue growth came on consolidation of Felda Holdings Bhd (FHB) and Pontian United Plantations Bhd's (PUP) income.
“Not only has the injection of FHB and PUP into FGV had an immediate, positive impact on the group’s revenues, it has also allowed FGV to acquire greater alignment and control of the entire plantation value chain, and attain higher operational efficiencies and synergies,” Mohd Emir said.
Looking ahead, he said FGV's revenue could gain from higher crude palm oil (CPO) prices in the coming quarters.
Mohd Emir said CPO export tax exemption and biodiesel policies would also support FGV's outlook.
“Revenue growth is anticipated to increase, as CPO prices are expected to continue rising into the first quarter of next year (2015).
At the same time, ongoing acquisitions of palm plantations with the optimal age profile, as well as our annual replanting programme of 15,000ha, will continue to ensure FGV’s plantation profile and yields steadily improve in the years ahead, Mohd Emir said.
FGV shares fell 10 sen or 3% at 12.30pm to settle at RM3.40, for a market capitalisation of RM12.4 billion.
The stock had declined 24% this year, underperforming the FBM KLCI's 2% loss.