The Borneo Post

Malayan Flour’s FY24 poultry losses to be offset by flour division

- Rachel Lau

Malayan Flour Mills Bhd’s (Malayan Flour) poultry joint-venture (JV) is expected to see losses in its financial year 2024 (FY24) results, but analysts are anticipati­ng this to be more than compensate­d by a recovery in its flour division profits.

In a company update report on March 19, analysts at AmInvestme­nt Bank Bhd (AmInvestme­nt Bank) said that they are forecastin­g Malayan Flour’s poultry JV to register a loss in FY24 due to a drop-in poultry demand.

The drop-in demand stems from the boycott of certain quick service restaurant­s which is likely to persist for the remainder of the year.

While Malayan Flour has guided that it will be focusing on more live bird products and other quick services restaurant­s and retailers to cushion this, AmInvestme­nt Bank is still forecastin­g Malayan Flour’s share of earning sin this poultry JV to come in at a loss of RM12 million, a huge drop from the RM25.9 million share of profit registered in FY23.

Neverthele­ss, the analyst guided their belief that Malayan Flour’s flour division will see an earnings recovery in FY24 which will more than compensate the expected poultry losses.

“We believe Malayan Flour’s flour division will perform well in FY24 on the back of higher sales volume and a drop in the cost of wheat.

“We forecast flour earnings before interest and tax (EBIT) to climb by 41 per cent to RM176.9 million in FY24 from RM125.3 million in FY23,” the analyst sounded off.

Recovery in Malayan Flour’s flour division was observed to have had begun back in FY23 where the group recorded a respective 12 per cent and 5.2 per cent increase in sales volume in Malaysia and Vietnam markets.

Due to this growing demand, Malayan Flour is slated to install a new RM30 million production line in Lumut, Perak which will command a milling capacity of 600 tonnes per day and is expected to be completed at the end of FY24.

“The group may also expand its flour mill in north Vietnam as it is operating close to 100 per cent,” AmInvestme­nt Bank added.

 ?? ?? AmInvestme­nt Bank is forecastin­g Malayan Flour’s poultry JV to register a loss in FY24 due to a drop-in poultry demand.
AmInvestme­nt Bank is forecastin­g Malayan Flour’s poultry JV to register a loss in FY24 due to a drop-in poultry demand.

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