KUALA LUMPUR (Feb 28): Malayan Flour Mills Bhd’s net profit for the fourth quarter of its financial year ended Dec 31, 2017 (4QFY17) fell 79% to RM4 million from RM18.7 million a year ago, mainly on lower contribution from two segments: flour and grains trading, and poultry integration.

Higher net interest expense during the quarter also weighed on profitability, though this was partially offset by higher share of profit of equity-accounted joint venture in the quarter.

The group’s revenue for the quarter fell 9% year-on-year to RM591.2 million from RM649.3 million.

It declared a second interim dividend of 3.5 sen per share, payable on March 30.

For the group’s full year ended Dec 31, 2017 (FY17), net profit fell 15% y-o-y to RM68.6 million from RM80.8 million, as revenue retreated 5% to RM2.4 billion from RM2.54 billion.

In FY17, its flour and grains trading segment recorded a revenue decline of 5% y-o-y to RM1.64 billion from RM1.74 billion, on lower sales volume.

“The operating profit for the 12 months ended Dec 31, 2017 rose 18.5% to RM63.6 million compared with RM53.7 million posted in the preceding year mainly due to net realised and unrealised gain on future and option contracts in 2017 compared to net realised and unrealised loss on future and option contracts in 2016,” it added.

For the poultry integration segment, it also recorded a 5% y-o-y fall in revenue to RM761.4 million from RM803.3 million, again due to lower sales volume. Operating profit fell 40% y-o-y to RM37.1 million from RM61.5 million, mainly due to lower margins and higher operating expenses. It also noted that there was a one-off insurance recovery of RM4.2 million in FY16.

The group expects its performance in FY18 to remain profitable despite the challenges of uncertain global economic environment, volatile commodity prices and foreign exchange rates.

As of closing, Malayan Flour Mills shares were unchanged at RM2.05 with about 590,700 shares traded, giving it a market capitalisation of RM1.13 billion.