PETALING JAYA: Staple foods producer Malayan Flour Mills Bhd’s (MFM) net profit for the nine months ended Sept 30, 2024 (9M’24) jumped 96.1% to RM64.1 million from RM32.7 million in the previous year’s corresponding period, largely due to the continued steady performance in the flour and grain trading (FGT) segment in Malaysia and Vietnam during the period.
The FGT segment, along with the aquafeed business, delivered a profit after tax (PAT) of RM81.3 million in 9M’24, a surge of 180.1% from RM29 million in the previous period, on a maintained revenue base of RM2.3 billion. The significant profit jump was mainly attributed to higher sales volume and improved margins due to lower wheat costs.
Meanwhile, PT Bungasari Flour Mills, MFM’s 30% associate in Indonesia, narrowed its loss after tax to RM20.7 million for 9M’24, an improvement from a loss of RM71 million in the same period last year, supported by higher sales volume with improved margin. Simultaneously, the share of loss from PT Bungasari Flour Mills in Indonesia amounted to RM6.2 million in 9M’24, compared to a loss of RM21.3 million in the same period of the previous year.
However, the better results in 9M’24 were partially offset by the weaker performance in the poultry integration segment, operated under the 51.0%-owned joint venture Dindings Tyson Sdn Bhd . The segment’s PAT declined sharply to RM0.8 million in 9M’24 from RM55.1 million previously, due to the impact of a boycott against Western-based fast-food chains following the Middle East geopolitical conflict, as well as the discontinuation of chicken subsidy since November 2023.
Dindings Tyson operates a state-of-the-art poultry processing plant in Sitiawan, Perak. It also owns one of Malaysia’s largest closed-house broiler farms, ensuring a steady supply of broilers to its processing plant, which sources both internally and from external farms.
MFM executive deputy chairman cum managing director Teh Wee Chye said: “Our FGT segment in Malaysia and Vietnam continue to deliver strong results, significantly contributing to our 9M’24 performance, and we expect it to end well for the remaining of the financial year. Although we are experiencing softer demand in Indonesia, we remain focused on optimising the efficiency and utilisation of our production capacity.”
Despite the challenges in the PI segment, MFM is confident that the difficulties will eventually pass, allowing it to return to the profitability levels it previously achieved.
In the meantime,Teh said, MFM is exploring new market opportunities, and it believes that as conditions improve, the PI segment will regain its momentum.
“Our strategy continues to focus on sustainable growth across all segments, ensuring we are well-prepared to navigate external pressure while creating value for our shareholders.”
For the third quarter ended Sept 30, 2024 (Q3’24), the group’s net profit decreased by 69.7% to RM7.3 million from RM24.2 million, due mainly to the negative joint-venture results from PT Bungasari Flour Mills and the PI segment. Meanwhile, group revenue increased by 3.1% to RM799.2 million in Q3’24 from RM774.9 million previously.
PT Bungasari Flour Mills in Indonesia suffered more severely during Q3’24, with a loss after tax increasing to RM34.3 million from RM13.2 million, attributed to weaker demand and reduced margins from flour products. This led to a share of loss of RM10.3 million in Q3’24 from RM4 million in the previous year.
The PI segment also reported a weaker performance, recording a loss after tax of RM5.2 million from a PAT of RM14 million, as a result of lower selling prices and discontinuation of chicken subsidy.
Further, the FGT segment’s PAT in Malaysia and Vietnam saw a decline of 4.1% to RM23.3 million from RM24.3 million previously, on lower margin contributions despite higher sales.
