KUALA LUMPUR (Feb 28): Malayan Flour Mills Bhd (MFM) reported a six-fold increase in its latest quarterly net profit ended Dec 31, 2021 (4QFY21) to RM24.02 million, compared with RM3.91 million in the immediate preceding quarter, on higher operating profit and revenue from its flour and grains trading segment.

Quarterly revenue increased 11.95% quarter-on-quarter (q-o-q) to RM694.69 million from RM620.52 million on higher sales. Earnings per share (EPS) rose to 2.36 sen, from 1.71 sen in 4QFY20.

The group declared an interim dividend of two sen per share, to be paid on March 25, 2022, the company’s filing with the local bourse showed. In comparison, the group declared a dividend of 1 sen per share for the financial year ended Dec 31, 2020 (FY20). 

“The company’s flour and grains trading segment recorded an operating profit of RM50.2 million, representing a 47.9% increase from that of 3QFY21. Profits generated from favourable flour margin arising from strong flour demand and higher selling prices of flour and by-product compensated for the higher wheat costs in 4QFY21,” said MFM. 

Its joint venture company, Dindings Tyson Sdn Bhd (DTSB), reported a share of profit of RM16.5 million in 4QFY21, versus a share of loss of RM16.7 million in 3QFY21.

DTSB generated a profit after tax of RM32.3 million versus a loss after tax of RM32.8 million previously. This was primarily due to higher sales volume of poultry processed products and improved selling prices, as well as a fair value gain on biological assets of RM35.6 million as compared to a loss of RM10.3 million in 3QFY21.

“In 4QFY21, profit from discontinued operations amounted to RM51.7 million, which mainly represents part of the gain on disposal of 49% equity interest in DTSB Group to Tyson International Holding Company, totalling RM174.3 million. An initial gain of RM126.2 million was recognised on May 31, 2021,” said MFM.

On a year-on-year basis, MFM’s net profit grew 39.1% in 4QFY21 from RM17.27 million in 4QFY20, as revenue rose 20.2% from RM577.93 million a year earlier.

For the full financial year ended Dec 31, 2021, MFM’s cumulative net profit swelled over 32 times to RM173.91 million against RM5.41 million in the previous year. Cumulative revenue increased 14.53% to RM2.43 billion from RM2.12 billion.

EPS soared to 17.8 sen, from 0.54 sen.

On prospects, MFM said if the Ministry of Domestic Trade and Consumer Affairs (MDTCA) allowed the company to increase its flour prices in the second quarter of this year to account for the spike in global wheat prices due to the geopolitical situation in Ukraine and potentially unfavourable impact of the global weather on wheat supply world wide, its board has an optimistic view about its outlook for 2022 onwards.

The group noted that the poultry industry had suffered tremendous losses and it needs to be resuscitated to ensure that national food security is restored.

“The company has also made considerable efforts in securing the relevant vaccines to curtail the [Covid-19] disease outbreak. In view of the above and the partnership with Tyson since end-May 2021 and the improved economic prospect for 2022 due to the herd immunity arising from high and full vaccination rate in the nation and the vaccine programme to curtail the Newcastle Disease outbreak, DTSB (the joint venture company) is optimistic of its outlook for 2022 and beyond,” it added.

At the time of writing on Monday (Feb 28), MFM shares had risen two sen or 3.28% at 63 sen, for a market capitalisation of RM642.38 million. The stock has fallen 29.21% over the past year from 89 sen.