KUALA LUMPUR (Aug 6): Malayan Flour Mills Bhd (MFM)’s net profit slipped 6% to RM12.70 million or 2.36 sen per share for the second quarter ended June 30, 2015 (2QFY15) from RM13.57 million or 2.52 sen per share a year ago, on higher net interest expenses and higher share of loss on equity accounted joint venture.

“The loss incurred in the joint venture was attributed by the unfavourable product margins and weakening of the Indonesian rupiah against the US dollar in 2QFY15 which resulted in unrealised losses on foreign exchange on its US dollar borrowings,” said MFM (fundamental: 0.8; valuation: 2) in its filing with the exchange today.

Meanwhile, its latest quarterly revenue was down 5% at RM535.56 million from RM563.80 million a year earlier, on lower sales in its poultry integration segment.

MFM declared an interim single tier dividend of 2 sen per share for its financial year ending Dec 31, 2015 (FY15), payable on Sept 4. Its shares will trade ex-dividend on Aug 19.

For the six months to June 30 (1HFY15), MFM’s net profit halved to RM18.10 million from RM36.70 million in 1HFY14 — due to lower margins from both flour and trading in grains and poultry integration segments, coupled with higher net interest expenses and higher share of loss on equity accounted joint venture in 2015.

Revenue was down 4% to RM1.09 billion from RM1.14 billion in 1HFY14.

Looking ahead, the group expects to perform favourably in FY15, despite the challenging environment due to volatile commodity prices and foreign exchange rates.

MFM fell 2 sen or 1.52% to RM1.30, translating to a market capitalisation of RM710.46 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)