KUALA LUMPUR (Nov 8): Malayan Flour Mills Bhd (MFM) slipped to its first quarterly loss in its third quarter ended Sept 30, 2018 (3QFY18), on the back of lower poultry sales — its first loss since the end of 2015.

MFM reported a net loss of RM5.19 million or 0.94 sen per share against a net profit of RM23.51 million or 4.27 sen per share in the same period last year (3QFY17).

Its poultry integration incurred operating losses of RM13.2 million — mainly on the back of depressed live bird prices — compared with an operating profit of RM9.1 million a year earlier.

Additionally, the lower earnings was also due to its share of loss of equity accounted as a result of its joint venture in Indonesia amounting to RM2.9 million in 3QFY18, against a share of profit of RM3.4 million last year. Net interest expense was also higher at RM8.03 million, compared with RM6.52 million a year ago.

However, revenue in the third quarter was nearly 2% higher at RM642.75 million.

For the cumulative nine-months (9MFY18), net profit plunged as much as 98.17% to RM1.18 million or 0.21 sen per share, from RM64.57 million or 11.73 sen per share last year. Revenue was 3.14% lower at RM1.75 billion, from RM1.81 billion in 9MFY17.

In a bourse filing, the company said the board is of the opinion that its performance will improve significantly in its final quarter of this year, despite commodity and foreign exchange rate volatilities, and an uncertain global economic environment.

”We expect an increase in our broiler production volume, as more contract farmers will participate in farming our broilers as a result of improved day-of-chicks (DOC) and feeds quality,” MFM said, adding it had achieved a targeted feed conversion ratio to reduce its production cost.

Efforts are already in place to institute price increases in its flour and grains trading segment to protect further margin erosion, the filing added.

MFM closed one sen or 0.91% higher at RM1.11 today, valuing the company at RM610.82 million. Over the past year, the stock has plunged 38.4% from RM1.80.