Higher raw ma­te­rial costs, weaker ring­git hurt MSM Q3 re­sults

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: MSM Malaysia Hold­ings Bhd’s net profit for the third quar­ter ended Sept 30, 2016 fell 63.5% to RM23.31 mil­lion from RM63.87 mil­lion a year ago due to higher raw ma­te­rial costs and the weaker ring­git.

Rev­enue rose 15.9% to RM633.12 mil­lion com­pared with RM546.49 mil­lion in the pre­vi­ous year driven by higher sales vol­ume.

For the nine months pe­riod, its net profit halved to RM106.33 mil­lion from RM214.04 mil­lion a year ago be­cause of higher raw ma­te­rial cost and pro­duc­tion cost.

Rev­enue, how­ever, grew by 10.83% to RM1.82 bil­lion RM1.64 bil­lion mainly from in­creased sales vol­ume from the group’s do­mes­tic and ex­port cus­tomers’ seg­ments.

MSM pres­i­dent and group CEO Mo­hamad Amri Sa­hari said raw sugar cost has in­creased tremen­dously to al­most 40% since early 2016 and has sig­nif­i­cantly af­fected its mar­gin.

“It was a chal­leng­ing quar­ter and we had in­vested a great ef­fort and en­ergy to steer through the global eco­nomic un­cer­tainty. Re­gard­less of this, we are con­fi­dent to reg­is­ter a solid rev­enue given our lion share of the mar­ket,” he said in a state­ment.

MSM has ap­proved an in­terim div­i­dend of 10 sen per share for the third quar­ter.

“The board’s de­ci­sion is a sign of con­fi­dence in the state of busi­ness and faith in MSM’s prospects for the fu­ture,” said Amri.

For the re­main­der of fis­cal 2016, MSM’s strat­egy re­mains fo­cused on cap­tur­ing avail­able op­por­tu­ni­ties in the sup­ply and de­mand dy­nam­ics as MSM fore­sees the spillover ef­fect to con­tinue in the sugar mar­ket un­til the end of first quar­ter 2017.

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