MSM sees improved results in near to medium term
KUALA LUMPUR: MSM Malaysia Holdings Bhd said it expects better results in the near to medium term, after posting a 55.3 per cent drop in third-quarter net profit.
Its net profit dropped to RM10.42 million in the third quarter ended September 30 from RM23.31 million a year ago.
In a filing to Bursa Malaysia yesterday, the company said the lower net profit was due to higher raw material costs and weakening ringgit.
“The group is of the view that the results are expected to improve in the near to medium term as a direct positive result from lower raw sugar price and improvement of operational costs,” it said.
MSM is the country’s leading refined sugar producer and a subsidiary of Felda Global Ventures Holdings Bhd.
In a separate statement, MSM president and chief executive officer Mohamad Amri Sahari said on a year-on-year basis, the cost of procuring raw sugar was still high at 18.65 per cent.
This was a result of higher sugar prices last year, which continued until middle of this year, although the ringgit had weakened by 5.88 per cent during the same period under review.
“I am encouraged with our progress and results this quarter. This demonstrates the strategic priorities we have laid out to accelerate our business transformation as we managed to stay true to our core business.
“We foresee world sugar prices to drop moderately, albeit remaining cautious of the US dollar versus ringgit uptrend risks, which can severely impede our growth,” said Amri.
Quarter-on-quarter, the average raw sugar cost for MSM increased by 11 per cent, compared with the same period last year, due to higher market price of raw sugar.
Its revenue for the quarter increased 5.6 per cent to RM668.52 million from RM633.12 million due to improved selling price.
For the nine-month period, MSM recorded a net loss of RM45.66 million against a net profit of RM106.33 million recorded in the same period a year ago.
Its revenue in the same period increased 10.4 per cent to RM2 billion from RM1.82 billion.
Amri said MSM’s future growth strategy was to ensure the completion of the Johor refinery remained on track.
The current construction is at 71 per cent completed as at September 30 and remained within the budget.