The Star Malaysia - StarBiz

MSM gets attention


OVER the last two days, the shares of MSM Malaysia Holdings Bhd seem to have awoken from a slumber.

For a stock that hovered around 60 sen a piece for a long time, it shot up on Thursday from 50 sen to 80 sen and then continued to that spectacula­r run to hit a high of RM1.08 on Friday, before settling down to 98 sen a share.

So what’s happening? MSM seems to be a beneficiar­y of the commoditie­s super cycle, well at least to those of us who believe there is such a cycle taking place.

What is clear is that there is an on-going rally in commodity prices as the world economy pulls out from the coronaviru­s-induced slump of 2020.

MSM is the country’s largest refined sugar producer.

On Thursday, it reported a net profit of Rm56.24mil for the fourth quarter ended Dec 31, 2020, compared to net loss of Rm40.28mil a year ago, due to higher overall margin and lower finance cost.

For its prospects, the company says that with the implementa­tion of the vaccinatio­n program, it anticipate­s national sugar consumptio­n to gradually improve.

It also said that it is gearing towards capacity and assets optimisati­on in FY2021 and expects the business environmen­t to remain optimistic.

This piece of good news comes after a major glitch.

Last October, MSM’S then CEO Datuk Khairil Anuar Aziz was axed after the board found his clarificat­ion about an adjustment to write off inventorie­s that amounted to Rm36.6mil unacceptab­le.

Subsequent­ly, a new CEO was appointed in the form of Syed Feizal Syed Mohammad, who says in the company’s recent quarterly report that the group’s capacity rationalis­ation’s efforts and consolidat­ion of operations have reduced their refining costs and improved capacity utilisatio­n rates.

He says the expansion of business segments for export markets has also broadened their market presence and diversifie­d their revenue stream.

Clearly, MSM is on a new path to profitabil­ity and it will continue to be a company to be watched. And it will be left to be seen if FGV Holdings Bhd continues to pursue the sale of a strategic stake in MSM. There are likely to be even more suitors now.

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