This article first appeared in The Edge Financial Daily on November 23, 2017

KUALA LUMPUR: MSM Malaysia Holdings Bhd’s net profit for the third quarter ended Sept 30, 2017 (3QFY17) fell 55% year-on-year (y-o-y) to RM10.42 million from RM23.31 million, no thanks to higher raw materials cost and a weaker ringgit.

Quarterly revenue, however, improved 5.59% y-o-y to RM668.52 million in 3QFY17 from RM633.12 million, supported by improved selling prices.

“The average raw sugar cost for the group had increased 11%, compared with the same period last year, due to higher market price of raw sugar,” MSM, said in a filing with Bursa Malaysia yesterday.

“The high raw sugar cost, however, [was] cushioned by an 8% increase in average selling price compared with the same period last year,” the sugar manufacturing and trading firm added.

However, in the first nine months of 2017 (9MFY17), MSM suffered a net loss of RM45.66 million, compared to a net profit of RM106.33 million a year ago, due to higher production and raw material costs.

Revenue accrued in 9MFY17, however, grew 10.4% y-o-y to RM2.01 billion from RM1.82 billion, due to better selling prices.

Looking ahead, “the results are expected to improve in the near to medium term as a direct positive result of lower sugar price and improvement in the operation cost”, MSM said.