KUALA LUMPUR: Malayan Flour Mills Bhd
(MFM), which saw its net profit tumble by 70% in the third quarter ending Sept 30 (3Q24), is expected to remain profitable for the financial year ending Dec 31, 2024.
MFM said commodity prices of wheat and grain remain volatile and continue to be impacted by the persisting uncertainties in macroeconomic and geopolitical considerations.
“The company will continue to monitor the impact of commodity prices arising from the global supply and demand dynamics and adjust selling prices accordingly and to diversify the sources of wheat, corn and soybean meal,” it said in the notes accompanying its financial results.
MFM noted that the removal of the chicken subsidy and price ceiling by the government is a positive step for chicken producers, once supply and demand for poultry stabilise.
“However, this equilibrium has been impacted by the weather, which impacts poultry output and import of poultry products from neighbouring countries.
“With the expected recovery in the demand and our synergistic partnership with Tyson International Holding Company, the company is optimistic of its outlook for 2025 and beyond,” it added.
MFM’s net profit tumbled 70% to RM7.3mi, or earnings per share of 0.59 sen in 3Q24 compared with RM24.2mil, or 2.37 sen a year ago.
In 3Q24, the group's operating profit was RM36.6mil as compared to RM38.4mil in 3Q23 due to lower profits from the flour and grain trading (FGT) segment and others segment.
Revenue for the quarter climbed 3.14% to RM799.2mil against RM74.9mil achieved in the previous year, driven by higher sales volume from the flour and grain trading segment, amidst lower selling prices.
For the first nine months, its net profit almost doubled to RM64mil from RM32.7mil while revenue was stable at RM2.3bil compared with RM2.35bil last year.
Executive deputy chairman and managing director Teh Wee Chye said the FGT segment in Malaysia and Vietnam continued to deliver strong results, making a significant contribution to its 9M24 performance. He expects the segment to maintain its positive momentum for the remainder 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 our poultry integration (PI) segment, we are confident that these difficulties will eventually pass, allowing us to return to the profitability levels we previously achieved. In the meantime, we are actively exploring new market opportunities, and we believe that as conditions improve, our 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.”
