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.