MFM optimistic about 2022 performance

KUALA LUMUR: Malayan Flour Mills Bhd (MFM) expects to remain profitable for the current financial year but anticipates challenges in the remaining months of 2022 amid macro uncertainties.

In a filing with Bursa Malaysia, the poultry processor and flour mills operator said the prices of wheat are expected to stay elevated into 2023 due to global weather challenges, even as some commodity prices are beginning to stabilise.

In addition, it said rising inflation and the weakening of the ringgit in the face of a strong US dollar will further compound the cost pressure.

Given these pressures, the group’s flour operations in Malaysia and Vietnam are expected to be impacted.

“The group will continue to monitor global wheat prices and wheat supply, which will have an impact on its future prices of flour,” it added.

“Going forward, the flour milling business will continue to sustain our earnings while the poultry integration (PI) segment is expected to enhance profit contribution to MFM as we accelerate the capacity utilisation at our primary processing plant,” said executive deputy chairman Teh Wee Chye in a statement.

Meanwhile, the group said it has an optimistic outlook on its poultry operations following the partial lifting of the chicken export ban on Oct 11, 2022, and improved domestic economic prospects.

The group is also positive on its synergistic partnership with Tyson International Holding Co that began end-may 2021.

For the third quarter ended Sept 30, 2022 (3Q22), MFM said net profit was at Rm46.21mil, bounding higher from a net profit of Rm3.91mil in the previous corresponding quarter, due mainly to the improving operations of its PI segment.

“The PI segment, operated by the joint-venture (JV) company with Tyson Foods, delivered an improved financial performance in 3Q22, after turning around only in the preceding quarter.

“The segment’s share of profit from its 51% stake came in at Rm19.1mil, versus a share of loss of Rm13.9mil last year,” said Teh.

For the quarter under review, the group’s basic earnings per share was at 4.53 sen, up from 0.38 sen in the same quarter last year.

The group reported a revenue of Rm799.45mil in 3Q22 compared to Rm620.52mil in the previous comparative quarter.

Over the nine months to Sept 30, 2022, based on continuing operations, net profit was up 53.1% year-on-year (y-o-y) to Rm98.17mil while revenue rose 21% y-o-y to Rm2.09bil.