MSM Malaysia returns to the black in 1Q
KUALA LUMPUR: MSM Malaysia Holdings Bhd ( MSM) returned to the black in the first quarter ended March 31, 2018, as it delivered a net profit of RM15.80 million against a net loss of RM34.62 million recorded in the previous comparable period.
The much-improved performance in the current quarter was attributable mainly due to lower raw material costs and favourable foreign exchange rate, said MSM.
The reduction in administrative expenses by 33 per cent, quarteron-quarter, or RM9.1 million from RM23.8 million was also one of the contributing factors to MSM’s performance.
Revenue, however, slipped 14.2 per cent to RM549.06 million from RM640.04 million recorded during the same quarter last year amid a seven per cent reduction in the overall tonnage sold and lower average selling price.
“While the circumstances were unfavourable in 2017, the first quarter performance shows encouraging signs towards a healthy balance sheet.
“It certainly is a continuous turn-around process and on this positive note MSM’s direction is firm to reinforce its leading role in this business,” said MSM executive director Datuk Khairil Anuar Aziz in a statement yesterday.
MSM was cont inuing to strengthen its operational focus by marking down its raw sugar cost by 23.1 per cent against the first quarter 2017.
This, however, was hampered by an increase in the average refining cost due to higher fuel cost which resulted from an upward revision of the gas tariff in January by 16 per cent.
Among others, he said the Johor refinery was slated for commissioning in the first half of 2018 and continued to be budget prudent and in accordance with the timeline.
The statement also said capacity growth was focused towards producing better margin and revenue via export sales improvement, particularly in South East Asia and the Middle East and North Africa markets.
Industry-wise, sugar yields have improved significantly mainly aided by favourable Asian monsoon rains leading to a global sugar glut. Additionally, global supply is estimated to beat demand by 10.40 million metric tonnes in the current season, 26 per cent more to erase shortages/deficit of the past two seasons.
MSM added that it was looking to further improve inventory management, supply and distribution efficiency and operating expenditure optimisation to remain resilient in the remaining quarters.
Most importantly, the company said it would continue to monitor its cash flow and working capital requirements while pro- active action would continue to be exercised for MSM to remain financially healthy, he added. — Bernama