KUALA LUMPUR (Feb 27): Malayan Flour Mills Bhd (MFM)’s net profit in the fourth quarter ended Dec 31, 2022 (4QFY2022) surged 95% to RM46.87 million, from RM24.03 million a year earlier, on the back of an 18% rise in revenue to RM819.56 million.

In a bourse filing on Monday (Feb 27), the staple foods producer said the better profitability was attributed largely to the continued improving operations of the group’s poultry integration (“PI”) segment, operated by the joint venture (“JV”) company with Tyson Foods.

In addition, it said there was a write back on remeasurement of contingent receivable amounting to RM8.8 million recognised during the quarter.

Earnings per share rose to 4.59 sen, from 2.36 sen.

MFM declared an interim dividend of 1.5 sen, to be paid on March 24.

However, for the year ended Dec 31, MFM’s net profit dipped to RM145.05 million versus RM173.91 million, despite revenue rising to RM2.92 billion against RM2.47 billion.

In a separate statement, MFM said the performance by the JV company was attributable to multiple factors, among which included continued market penetration into the QSR chains, improved margins from economies of scale as a result of increased plant utilisation, better sales mix with increased average selling prices, in addition to a higher deferred tax asset recognised arising from tax incentives.

It said the segment saw a 13.9% increase in revenue to RM302.7 million, versus RM265.8 million of the same quarter last year.

Malayan Flour Mills Bhd (MFM)’s executive deputy chairman Teh Wee Chye. (Photo credit: MFM)

MFM said its flour and grains trading (FGT) segment across Malaysia and Vietnam, together with other businesses, contributed to a marginal pre-tax profit of RM2.9 million in 4QFY2022, versus RM48.8 million in 4QFY2021, principally on account of the segment being adversely impacted by high commodity prices and finance costs, coupled with foreign exchange translation loss from a stronger US dollar during the quarter.

MFM’s executive deputy chairman Teh Wee Chye said the financial performance for this quarter, while below expectation for the FGT segment, showed the resilience of its business model of providing staple foods of flour and processed chicken.

“Despite volatility of our raw materials prices and rising interest rates, our 4Q(FY20)22 numbers point to our ability to contain overall business risks for the group.

“Prospects remain bright, as the poultry integration segment continues its momentum of volume optimisation, in line with rising demand for our processed meat by our clients in QSR and food manufacturing sectors,” he said.

At the midday break on Monday, MFM rose 5.84% or 4.5 sen to 81.5 sen, with 4.5 million shares traded.