Malayan Flour Mills 4Q net profit jumps on lower costs and tax expenses, with higher JV profit

Malayan Flour Mills 4Q net profit jumps on lower costs and tax expenses, with higher JV profit
-A +A

KUALA LUMPUR (Feb 26): Malayan Flour Mills Bhd's (MFM) net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) jumped to RM17.27 million, five times the RM3.26 million it made in the corresponding quarter a year earlier, mainly due to lower operating costs, tax expenses and higher share of profit from a joint venture (JV).

Operating expenses fell 12.8% to RM49.15 million from RM56.73 million a year ago, while net finance expenses dropped 12.2% to RM2.76 million from RM3.14 million. While its tax expenses almost halved to RM4.74 million from RM9.16 million, its share of profit of equity accounted JV doubled to RM5.71 million from RM2.41 million.

Revenue, meanwhile, slipped 1.06% to RM712.01 million from RM719.67 million, due to lower sales in its flour and grains trading segment, as well its poultry integration segment.

Although the growth in quarterly earnings was remarkable, its net profit for the full year ended Dec 31, 2020 (FY20) sank 87.48% to RM5.41 million from RM43.25 million a year ago — despite annual revenue being sustained at RM2.68 billion — mainly because its poultry segment's operating loss more than doubled to RM70 million from RM31.9 million.

Nonetheless, the group has declared its first and sole interim dividend of one sen per share for FY20, payable on March 26, 2021. In contrast, the group paid three sen for FY19.

MFM's shares closed three sen or 3.49% lower at 83 sen today, giving it a market capitalisation of RM843 million, after 7.46 million shares were traded.

Tan Choe Choe