MSM’s 3Q net loss narrows to RM71m as revenue rises on higher sales

TheEdge Mon, Nov 16, 2020 07:28pm - 3 years View Original


KUALA LUMPUR (Nov 16): MSM Malaysia Holdings Bhd’s net loss narrowed to RM71.21 million in the third quarter ended Sep 30, 2020 (3QFY20) compared with a net loss of RM185.1 million a year ago thanks to improved sales margin and new export products.

Revenue improved by 12% to RM594.55 million versus RM531.69 million in the previous year, attributed to the increased sales volume for industry and export markets as well as better export premium.

It reported a loss per share of 10.13 sen versus a loss per share of 26.33 sen previously.

In a statement today, the brand owner of ‘Gula Prai’ said it recorded operational profit of RM5.6 million for 3Q20 before any impairment adjustments.

“During the period, the company wrote off RM27.2 million involving bearer plants on the rubber plantation affected by fire in Chuping, Perlis and a further net impairment adjustment of RM35.7 million following the change in accounting treatment of the same assets due to cancellation of earlier sale plan, ultimately resulting in RM57.4 million losses before tax,” it said.

For the domestic market, MSM said higher margins were achieved due to improved key operational parameters such as processing yield and refining cost.

“From the export front, we recorded a fivefold increase in volume at 92,000 metric tons (MT) in 3Q20 from 19,000 MT last year with higher premium, significantly contributing to our efforts in maximising the Group’s capacity utilisation,” it said.

For the cumulative nine months, MSM reported a net loss of RM127.47 million, narrowing from a net loss of RM259.49 million previously, while revenue grew 4% to RM1.55 billion from RM1.49 billion last year.

“MSM continues to show resilience in optimising domestic market, delivering export growth and enriching product offerings to fulfil customers’ requirements. Our two processing plants in Prai and Johor have also recorded operational improvements on the back of few technical setbacks in Johor as we strive to deliver sustainable performance.” said MSM Acting Group Chief Executive Officer Fakhrunniam Othman.

Operationally, the Group also generated better processing yield and refining cost by 3% and 13% respectively compared with 3Q last year, it said. These achievements were made possible by greater efficiency, strengthened internal processes and higher capacity utilisation at both refineries.

On its prospects, MSM said it has started exporting its new products in the form of liquid sugar, fine syrup and premixes, which are part of the group’s diversification program which will see MSM producing and exporting value-added sugar-based products into the market.

Fakhrunniam added, “Turning out as planned, the development of our value-added products for exports, consolidation of refining capacity and demarcation of markets have gradually brought about improvement in our products delivery to customers. Despite the global pandemic challenges and weak outlook in some industries, we remain committed to execute our turnaround plan and growth strategies.”

Shares of MSM ended one sen or 1.89% higher at 54 sen, for a market capitalisation of RM379.61 million.

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